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For personal use only
27 October 2014
ASX Market Announcements
By: e-lodgement
Notice of Annual General Meeting and Annual Report
Please be informed that the Notices of Annual General Meeting for Thursday, 27 November 2014
(to be held at Adina Apartment Hotel Perth, 33 Mounts Bay Road, Perth, WA 6000) and the
company’s Annual Reports have been despatched today.
Copy of the Notice of Annual General Meeting and the Annual Report is attached.
Yours sincerely
Neville Bassett
Company Secretary
ABN 99 107 541 453 Suite 4, Henry James Building, 8 Alvan Street, Subiaco, WA 6008; PO Box 1325, West Perth, WA 6872
Tel.: +61 8 6 188 7800 Fax: +61 8 9 381 9888
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For personal use only
ABN 99 107 541 453
Notice of Annual General Meeting
Explanatory Statement
and
Proxy Form
TIME
11.00am (WST)
DATE
Thursday 27 November 2014
PLACE
Adina Apartment Hotel Perth
33 Mounts Bay Road
Perth WA 6000
NOTICE OF ANNUAL GENERAL MEETING
For personal use only
Notice is hereby given that the Annual General Meeting of members of Vector Resources
Limited (Vector or the Company) will be held on Thursday, 27 November 2014,
commencing at 11.00am (WST) at the Adina Apartment Hotel Perth, 33 Mounts Bay Road,
Perth, Western Australia.
The enclosed Explanatory Statement accompanies and forms part of this Notice of Annual
General Meeting.
AGENDA
ORDINARY BUSINESS
Accounts and Reports
To receive and consider the annual financial report for the financial year ended
30 June 2014, together with the reports by directors and auditors thereon.
To consider and, if thought fit, pass the following resolutions as ordinary resolutions:
Resolution 1 - Adoption of Remuneration Report
That, for the purpose of section 250R(2) of the Corporations Act and for all other purposes,
the Remuneration Report set out in the Company’s Annual Report for the financial year ended
30 June 2014 be adopted.
Note: The vote on this resolution is advisory only and does not bind the directors of the
Company.
Voting Exclusion Statement:
Pursuant to section 250R(4) of the Corporations Act, the Company is required to disregard any votes cast on
Resolution 1 (in any capacity) by or on behalf of any of the following persons:
(a)
a member of the Key Management Personnel, details of whose remuneration are included in the
Remuneration Report; or
(b)
a Closely Related Party of such a member (together “prohibited persons”).
However, the Company will not disregard a vote if:
(c)
the prohibited person does so as a proxy appointed by writing that specifies how the proxy is to
vote on the proposed resolution; and
(d)
the vote is not cast on behalf of a prohibited person.
Resolution 2 - Re-election of Director Mr Brian Williams
That, Mr Brian Williams, being a Director of the Company who retires in rotation in
accordance with Clause 6.3(c) of the Company’s Constitution and, being eligible, offers
himself for re-election, be re-elected as a director of the Company.
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Resolution 3 – Issue of Convertible Notes
For personal use only
That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, the Directors be
authorised to:
(a)
issue up to 1,850,000 Convertible Notes at a price of $1.00 per Note; and
(b)
issue upon the conversion of up to 1,850,000 convertible notes with a face value of
$1,850,000 such number of Shares to be determined at a conversion price of the lesser
of:
(i) the lowest issue price of new Shares during the conversion period; or
(ii) the price that is 80% of the average market price of the Company’s ordinary fully
paid shares calculated over the last five days on which sales were recorded before
the date of conversion and issue,
and otherwise on the terms and conditions set out in the Explanatory Statement
accompanying this Notice of General Meeting.
Voting Exclusion Statement:
The Company will disregard any votes cast on this resolution by a person who may participate in the proposed
issue and a person who might obtain a benefit, except a benefit solely in the capacity of an ordinary security
holder, if the resolution is passed, and any associate of them. However, the Company need not disregard a vote
if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the
proxy form; or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in
accordance with a direction on the proxy form to vote as the proxy decides.
BY ORDER OF THE BOARD
Neville Bassett
Company Secretary
17 October 2014
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IMPORTANT INFORMATION
TIME AND PLACE OF MEETING
For personal use only
Notice is given that the Annual General Meeting of the Shareholders to which this Notice relates will
be held at 11.00am (WST) on Thursday, 27 November 2014 at:
Adina Apartment Hotel Perth
33 Mounts Bay Road
Perth WA 6000
YOUR VOTE IS IMPORTANT
The business of the Annual General Meeting affects your shareholding and your vote is important.
VOTING ELIGIBILITY
The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001
(Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered
Shareholders at 11.00am (WST) time on Tuesday, 25 November 2014.
VOTING IN PERSON
To vote in person, attend the Annual General Meeting at the time, date and place set out above.
VOTING BY PROXY
To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in
accordance with the instructions set out on the Proxy Form.
Sections 250BB and 250BC of the Corporations Act provide that:
•
if proxy holders vote, they must cast all directed proxies as directed; and
•
any directed proxies which are not voted will automatically default to the Chair, who must vote
the proxies as directed.
Proxy vote if appointment specifies way to vote
Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the
way the proxy is to vote on a particular resolution and, if it does:
•
the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that
way (i.e. as directed); and
•
if the proxy has two or more appointments that specify different ways to vote on the resolution –
the proxy must not vote on a show of hands; and
•
if the proxy is the Chair of the meeting at which the resolution is voted on – the proxy must vote
on a poll, and must vote that way (i.e. as directed); and
•
if the proxy is not the Chair – the proxy need not vote on the poll, but if the proxy does so, the
proxy must vote that way (i.e. as directed).
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Transfer of non-chair proxy to chair in certain circumstances
For personal use only
Section 250BC of the Corporations Act provides that, if:
•
an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a
meeting of the Company's members; and
•
the appointed proxy is not the Chair of the meeting; and
•
at the meeting, a poll is duly demanded on the resolution; and
•
either of the following applies:
o
the proxy is not recorded as attending the meeting;
o
the proxy does not vote on the resolution,
the Chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the
proxy for the purposes of voting on the resolution at the meeting.
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EXPLANATORY STATEMENT
For personal use only
1.
INTRODUCTION
This Explanatory Statement has been prepared for the information of members of Vector
Resources Limited (“the Company”) in connection with the business to be conducted at the
Annual General Meeting of members to be held at the Adina Apartment Hotel Perth, 33 Mounts
Bay Road, Perth, Western Australia on Thursday, 27 November 2014 at 11.00am (WST).
This Explanatory Statement forms part of and should be read in conjunction with the
accompanying Notice.
2.
2014 ANNUAL REPORT
In accordance with the requirements of the Company’s Constitution and the Corporations Act,
the 2014 Annual Report will be tabled at the Annual General Meeting. Shareholders will have
the opportunity of discussing the Annual Report and making comments and raising queries in
relation to the Report. There is no requirement for a formal resolution on this item.
Representatives from the Company’s auditors, Grant Thornton, will be present to take
shareholders’ questions and comments about the conduct of the audit and the preparation and
content of the audit report.
Annual Report Online
Shareholders who have not elected to receive a hard copy of the Annual Report can access the
report on the Company’s website at www.vectorresources.com.au
3.
RESOLUTION 1 - ADOPTION OF REMUNERATION REPORT
3.1
General
The Corporations Act requires that at a listed company’s Annual General Meeting, a
resolution that the remuneration report be adopted must be put to the shareholders.
However, such a resolution is advisory only and does not bind the Directors of the
Company.
Pursuant to the Corporations Act, if at least 25% of the votes cast on Resolution 1 are
voted against adoption of the Remuneration Report at the Annual General Meeting, and
then again at the Company’s 2015 Annual General Meeting, the Company will be
required to put to Shareholders a resolution proposing the calling of an extraordinary
general meeting to consider the appointment of directors of the Company (Spill
Resolution).
If more than 50% of the Shareholders vote in favour of the Spill Resolution, the Company
must convene the extraordinary general meeting (Spill Meeting) within 90 days of the
Company’s 2015 Annual General Meeting. All of the Directors who were in office when
the Company’s 2015 Directors’ Report was approved, other than the Managing Director
of the Company, will cease to hold office immediately before the end of the Spill Meeting
but may stand for re-election at the Spill Meeting. Following the Spill Meeting those
persons whose election or re-election as Directors is approved will be the Directors of the
Company.
At the Company’s previous Annual General Meeting the votes cast against the
remuneration report considered at that Annual General Meeting were less than 25%.
Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.
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For personal use only
The Remuneration Report sets out the Company’s remuneration arrangements for the
Directors and senior management of the Company. The Remuneration Report is part of
the Directors’ Report contained in the annual financial report of the Company for the
financial year ended 30 June 2014.
A reasonable opportunity will be provided for discussion of the Remuneration Report at
the Annual General Meeting.
3.2
Proxy Restrictions
Pursuant to the Corporations Act, if you elect to appoint the Chair, or another member of
the Key Management Personnel or any Closely Related Party as your proxy to vote on
this Resolution 1, you must direct the proxy how they are to vote. Where you do not
direct the Chair, or another member of the Key Management Personnel or Closely
Related Party on how to vote on this Resolution 1, the proxy is prevented by the
Corporations Act from exercising your vote and your vote will not be counted in relation
to Resolution 1.
4.
RESOLUTIONS 2 - RE-ELECTION OF DIRECTORS
Resolutions 2 relates to the re-election of Mr Williams as Director.
In accordance with the requirements of Clause 6.3(c) of the Company’s Constitution and the
Corporations Act, one-third of the directors of the Company retire from office at this Annual
General Meeting of the Company. Mr William retires by rotation and, being eligible, offers
himself for re-election.
A summary of the qualifications and experience of Mr Williams is provided in the Annual
Report.
5.
RESOLUTION 3 – ISSUE OF CONVERTIBLE NOTES
Resolution 3 of the Notice seeks Shareholder approval for:
(a)
the issue of up to 1,850,000 Convertible Notes at a price of $1.00 per Note; and
(b)
the issue upon the conversion of up to 1,850,000 convertible notes with a face value of
$1,850,000 such number of Shares to be determined at a conversion price of the lesser of:
(i) the lowest issue price of new Shares during the conversion period; or
(ii) the price that is 80% of the average market price of the Company’s ordinary fully
paid shares calculated over the last five days on which sales were recorded before
the date of conversion and issue.
On 28 July 2014 the Company announced that it had arranged for full repayment of its existing
secured debt facility, to be replaced by unsecured convertible notes (“Notes”) with a face value
of $1,850,000. The issue of the Notes and the conversion of the Notes to Shares is conditional
on Shareholder approval. The principle terms of the Notes are as detailed in (c) below.
The number of Shares that may be issued by the Company upon the conversion of Notes may
exceed the 15% threshold requiring shareholder approval. To retain the Company’s 15% equity
security placement capability, shareholder approval is being sought for the issue of Shares on
conversion of Notes so as to allow the issue of further securities in the future, without the
necessity for Shareholder approval.
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For personal use only
In compliance with the information requirements of ASX Listing Rule 7.3 members are advised
of the following particulars in relation to the issue of the Notes and of Shares on conversion of
Notes:
(a)
the amount of funds raised by the Notes is $1,850,000. A Note will convert into the
number of Shares calculated by dividing that part of the amount provided as an advance
pursuant to the Note, the face value, by the Conversion Price as described in (c) below.
(b)
the Notes will be issued to sophisticated and professional investors as defined in
section 708 of the Corporations Act.
(c)
The principle terms of the Notes are as follows:
Face Value:
$1.00 each
Redemption Date:
12 months from date of issue
Coupon Rate:
Nil
Conversion Price:
The lesser of:
(a) the lowest issue price of new Shares during the conversion
period; or
(b)
6.
the price that is 80% of the average market price of the
Company’s ordinary fully paid shares calculated over the
last five days on which sales were recorded before the date
of conversion and issue.
Conversion Period:
Convertible, in whole or in part, by the Noteholder at any time
from the date of issue and prior to the Redemption Date.
Security:
Unsecured
ASX:
The Company will not apply to ASX for quotation of the Notes.
Upon conversion of a Note, the Company will apply for
quotation of the Shares issued pursuant to the conversion.
(d)
the terms and conditions of the Shares issued upon conversion of Notes will be the same
as the Shares in the Company already on issue and will from the date of issue rank
equally in all respects with the then existing Shares.
(e)
Funds raised of $1,850,000 have been used to repay secured debt of $1,550,000 and for
working capital.
(f)
The issue of Notes will occur on one date, no later than three months after the date of this
Meeting. Allotment of Shares will occur progressively upon the conversion of Notes.
DEFINITIONS
$ means Australian dollars.
Annual General Meeting or Meeting means the meeting convened by the Notice.
ASX means ASX Limited ABN 98 008 624 691.
ASX Listing Rules means the official listing rules of ASX.
Board means the current board of directors of the Company.
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Constitution means the Company’s Constitution.
For personal use only
Closely Related Party of a member of the Key Management Personnel means:
(a)
(b)
(c)
(d)
(e)
(f)
A spouse or child of the member;
A child of the member’s spouse;
A dependent of the member or the member’s spouse;
Anyone else who is one of the member’s family and may be expected to influence the
member, or be influenced by the member, in the member’s dealing with the entity;
A company the member controls; or
A person prescribed by the Corporations Regulations 2001 (Cth).
Corporations Act means the Corporations Act 2001 (Cth).
Directors means the current directors of the Company.
Explanatory Statement means this Explanatory Statement.
Key Management Personnel has the same meaning as in the accounting standards and broadly
includes those person having authority and responsibility for planning, directing and controlling
the activities of the Company, directly or indirectly, including any director (whether executive
or otherwise) of the Company.
Notice or Notice of Meeting or Notice of Annual General Meeting means this Notice of
Annual General Meeting including the Explanatory Statement and the Proxy Form.
Remuneration Report means the remuneration report set out in the Directors’ Report section
of the Company’s annual financial report for the year ended 30 June 2014.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means the holder of a fully paid ordinary share in the capital of the Company.
Vector or the Company means Vector Resources Limited ABN 99 107 541 453.
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PROXY FORM
For personal use only
The Secretary
Vector Resources Limited
PO Box 1325
West Perth WA 6872
Fax: (08) 9381 9888
I/We (full name) _____________________________________________________________________________________________
of ________________________________________________________________________________________________________
being a member(s) of Vector Resources Limited, hereby appoint as my/our proxy
___________________________________________________________________________________________________________
of_________________________________________________________________________________________________________
or, failing him/her the Chairperson of the Meeting to attend and vote for me/us at the Annual General Meeting of the Company to be
held at 11.00am (WST) on Thursday, 27 November 2014 and at an adjournment thereof in respect of __________% of my/our shares
or, failing any number being specified, ALL of my/our shares in the Company.
RESOLUTIONS
FOR
1
Adoption of Remuneration Report
2
Re-election of Director Mr Brian Williams
3
Issue of Convertible Notes
AGAINST
ABSTAIN
Where permitted, the Chairperson intends to vote all undirected proxies in favour of all resolutions.
If the member is an individual or joint holder:
_________________________________
Usual Signature
_________________________________
Usual Signature
If the member is a Company:
Signed in accordance with the Constitution of the Company in the presence of:
Director/Sole Director
Dated this
Director/Secretary
day of
2014.
Sole Director and Sole Secretary
For personal use only
INSTRUCTIONS FOR COMPLETING PROXY FORM
1.
A member entitled to attend and vote is entitled to appoint not more than two proxies.
2.
Where more than one proxy is appointed and that appointment does not specify the proportion or
number of the member’s votes, each proxy may exercise half of the votes.
3.
A proxy need not be a member of the Company.
4.
A proxy is not entitled to vote unless the instrument appointing a proxy and the power of attorney or
other authority (if any) under which it is signed is either deposited at the registered office of the
Company (refer below) or sent by facsimile to that office on fax 08 9381 9888 to be received not less
than 48 hours prior to the time of the Meeting.
5.
Signing Instructions
Individual: where the holding is one name, the Shareholder must sign.
Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.
Companies: where the company has a Sole Director who is also the Sole Company Secretary, this
form must be signed by that person. If the Company (pursuant to section 204A of the Corporations
Act 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form
must be signed by a Director jointly with either another Director or Company Secretary. Please
indicate the office held in the appropriate place.
If a representative of the corporation is to attend the meeting the appropriate “Certificate of
Appointment of Corporate Representative” should be lodged with the Company before the meeting
or at the registration desk on the day of the meeting.
6.
Important for Resolution 1
If the Chair of the Meeting or any member of the Key Management Personnel of the Company or a
Closely Related Party of a member of the Key Management Personnel of the Company is your proxy
and you have not directed the proxy how to vote on Resolution 1, the proxy will be prevented from
casting your votes on Resolution 1. If the Chair, another member of the Key Management Personnel
of the Company or Closely Related Party of a member of the Key Management Personnel is your
proxy, in order for your votes to be counted on Resolution 1, you must direct your proxy how to vote
on Resolution 1.
LODGING YOUR PROXY FORM
To be valid, your proxy form (and any Power of Attorney under which it is signed) must be received at the
address given below no later than 11.00am (WST) on Tuesday, 25 November 2014. Any proxy form
received after that time will not be valid for the scheduled meeting.
In person:
Vector Resources Limited
Suite 4, Henry James Building
8 Alvan Street
Subiaco WA 6008
By mail:
Vector Resources Limited
PO Box 1325
West Perth WA 6875
By fax:
(08) 9381 9888
For personal use only
TABLEOF CONTENTS CONTINUED
CORPORATE DIRECTORY
Directors
For personal use only
Gary Castledine
Glyn Povey
Neville Bassett
Brian Williams
Non-executive Chairman
Managing Director
Non-executive Director
Non-executive Director
Company Secretary
Neville Bassett
Registered Office and Principal Office
Suite 4, Henry James Building
8 Alvan Street
Subiaco WA 6008
Tel:
Fax:
Email:
Website:
+61 (0)8 6188 7800
+61 (0)8 9381 9888
[email protected]
www.vectorresources.com.au
Postal Address
PO Box 1325
West Perth WA 6872
Auditors
Grant Thornton Audit Pty Ltd
Level 1, 10 Kings Park Road
West Perth WA 6005
ASX Code
VEC
Share Registry
Link Market Services Limited
Level 4, Central Park
152 St Georges Terrace
PERTH WA 6000
Tel:
Fax:
+61 (0)8 9211 6670
+61 (0)8 9211 6660
TABLEOF CONTENTS CONTINUED
TABLE OF CONTENTS
REVIEW OF ACTIVITIES .............................................................................................................................................. 1
For personal use only
DIRECTORS’ REPORT ................................................................................................................................................. 6
AUDITOR’S INDEPENDENCE DECLARATION .................................................................................................................. 18
AUDITOR’S REPORT ................................................................................................................................................ 19
DIRECTORS’ DECLARATION....................................................................................................................................... 22
CONSOLIDATED STATEMENT OF PROFIT OF LOSS AND OTHER COMPREHENSIVE INCOME .................................................... 23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................................... 24
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................................. 25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................................... 26
NOTES TO THE FINANCIAL STATEMENTS ..................................................................................................................... 27
ADDITIONAL SHAREHOLDER INFORMATION................................................................................................................. 64
CORPORATE GOVERNANCE STATEMENT ..................................................................................................................... 70
TABLEOF CONTENTS CONTINUED
For personal use only
REVIEW OF ACTIVITIES
Overview
Vector Resources Limited (“Vector” or the “Company”) is a Western Australian focused resource company. During the
financial year, Vector continued to evaluate its asset portfolio and concentrate on the implementation of the trial bulk
sample program as part of the Gwendolyn East Cutback Project.
The company carried out major reviews of its projects within the three major hubs of Southern Cross, Leonora and
Earaheedy Basin during the financial year. These reviews based on additional data allowed the company to determine
the potential viability of the projects moving forward for determination of release or retention.
Mt Dimer (M77/427, M77/428, M77/957, M77/958, M77/965, E771992, E77/2050, P77/4081 & P77/4086)
The Mt Dimer Project located in the Archaean Diemals-Marda Greenstone Belt contains proven high-grade quartz
hosted gold mineralisation, this ground covers 2,480.6 hectares. During the year, the company carried out reviews on
the previous exploration reverse circulation (RC) drilling and the twenty-two potential targets identified through the
aeromagnetic and geochemical data. This review interrogated the current open Program of Works (POW) targets,
totalling 24,633 metres of RC and air-core drilling. This planned drilling was postponed as the company concentrated on
the Gwendolyn Project.
The company continued its environmental monitoring of the two main tenements M77/427 and M77/428 during the
year. This monitoring is of historical disturbance and the rate of regrowth on rehabilitated areas. The company reestablished a historical monitoring bore of the Mt Dimer tails dam and carried out weed control measures in locations
near the existing open pits.
Gwendolyn (M77/1263 & E77/1580)
The Gwendolyn East Cutback Project consist of tenements M77/1263, E77/1580, G77/119 and three miscellaneous
licenses covering more than 487 hectares located within a historic mined area. During the year, the company secured
the debt funding to carry out a bulk sample program which formed part of the Phase 1 operations of the Gwendolyn
East Cutback Project Mining Proposal.
In January 2014, the company completed the grade control program over two of the four pits (A and B) that formed the
Gwendolyn East Cutback Project Phase 1. The data from this grade control was used to bolster the previous data set of
recent exploration drilling and historic data used to develop the Gwendolyn resource. Refined mine designs were
completed in March 2014 and economic modelling showed the viability of commencing the bulk sample program. The
main aim of this bulk sample was to test the variability of the deposit based on the coarse gold affect and provide
further surplus cash to continue Phase 1 operations and other exploration activities within the company’s portfolio.
1
TABLEOF CONTENTS CONTINUED
For personal use only
Figure 1 & 2: Gwendolyn Pit ‘A’ Photo During Grade Control – Looking South-east to South-west
Figure 3 & 4: Gwendolyn Pit ‘B’ Photo During Grade Control – Looking North-east and South-west
In late March 2014, key personnel were mobilised to site in preparation for the arrival of temporary infrastructure and
mining equipment. Infrastructure and mine access was completed in the first week of April and mining operations
commenced on the 4 April 2014. The planned bulk sample was targeting sufficient tonnes of ore from the two pits for
toll processing at the Greenfields Mill in Coolgardie to give the company a set of ‘Nugget Factor Parameters’ to work
with on future modelling work.
Mining operations of the bulks samples from Pits A and B were completed on the 4 June 2014 without issue. Additional
auger drilling was carried out on each 2.5 metre flitch and tested on-site for gravity content with the aim to gain
additional ore on the perimeter of the model blocks.
2
TABLEOF CONTENTS CONTINUED
For personal use only
Figure 5-12: Gwendolyn Pits ‘A&B’ Photos of Some Auger Drilling Results
The results from auger samples were encouraging for the identification of additional material just outside the block
boundaries. Mining was sequenced between the two pits to allow time for the auger sampling while maximising
equipment utilisation. The use of six-wheeled articulated dump trucks allowed for effective mining parameters allowing
a reduction in the strip ratios.
Mining flitches were at 2.5 metres utilising conventional free dig excavator and load haul operations. No drilling or
blasting was required during the bulk sample. Site personnel numbers were maintained at low levels with the use of
multi-skilled machine operators as part of the Hampton workforce. During the mining operations, the site experienced
four major rain events which had no impact on the mining activities due to type of equipment selected.
Figure 13 & 14: Gwendolyn Photos of Pits ‘A&B’ Excavations
Road train haulage operations were scheduled for late in April but access to public road due to rain, delayed the
commencement. Haulage operations commenced 6 May 2014, utilising a “B” double plus one configuration. Hampton
Mining & Civil Services was contracted to carry out this work at various road train numbers based on maintaining a
minimal mine run-of-mine (ROM) stockpile. Road haulage operations were carried out on a continuous 24-hour cycle
with vehicle movements varying between eight to sixteen return cycles during a day. Haulage was carried out from the
mine site to the Greenfields Mill toll processing facility. The first batch of ore processing commenced when 13,000
tonnes of ore were transported to the mill’s ore pad.
3
TABLEOF CONTENTS CONTINUED
For personal use only
Figure 15-19: Gwendolyn Photos of Pits ‘A&B’ ROM Pads
On the 11 June 2014, the milling campaign commenced at the toll processing facility in Coolgardie. On the
26 June 2014, the first gold pours and GIC balance was completed and reconciled against the model head grades which
showed the head grade significantly lower than the model predictions. Haulage was completed on the 2 July 2014 and
processed on the 4 July 2014 with a reconciled recovered grade for the bulk sample of 3.35g/t.
The bulk sample campaign produced 3,150 Au ounces with the average mill feed grade achieved significantly below the
company’s expectations based on the independent assessment from the grade control model. The gold recovery was
insufficient to cover the costs of the milling campaign.
Based on the results of the bulk sample, the company has been reviewing the metal balance and reconciling back to the
block model. Future mining operations at Gwendolyn are on hold pending completion of the review.
Mt Palmer (E77/1318 & P77/3678)
The Mt Palmer Project comprising an Exploration Licence 77/1318 and a Prospecting Licence 77/3678 is located 32km
east of Southern Cross. Mt Palmer is part of the Southern Cross Greenstone Belt of the Yilgarn Block. The 180km long
Archaean greenstone belt is host to a number of past and present gold producers. The area has seen historic gold
production (315,203 tonnes grading 15.6 g/t for 158,000 ounces of gold) prior to the Second World War.
During the year, the company carried out a review of the ground associated with the Mt Palmer Project and
relinquished a portion of ground on E77/1386 as no targets of interest were identified. The company intends to
concentrate its focus on the POWs for E77/1318 and P77/3678 consisting of a drilling campaign of 129 RC drill holes.
Great Bingin (M77/1255)
The Great Bingin Project is located approximately 30km north of Bullfinch. The lease lies within an east-west orientated
peninsular which is surrounded on all but the western side by Lake Deborah. The company has maintained its approved
POW to undertake RC drilling consisting of 52 RC drill holes. This program aims to test the mineralisation at depth, and
confirm the extension of mineralisation above and below the old workings and the potential extension of mineralisation
along strike.
4
TABLEOF CONTENTS CONTINUED
Athenia (M77/1260)
For personal use only
The Athenia Project consists of a Mining Lease 77/1260 which is located approximately 8km northwest of Southern
Cross. This lease covers a group of old shafts and workings that form part of the historic Athenia gold workings. The
company has maintained its approved POW for this Project that consists of 29 RC drill holes that are aimed to target the
sediment and mafic contact zones.
Earaheedy JV (50% Vector Resources Limited/50% Cazaly Resources Limited)
Vector and Cazaly Resources Limited (ASX:CAZ) (collectively the Earaheedy Joint Venture, “EJV”) had a farm-in
agreement with Anglo American, covering a large part of the Earaheedy East Iron Project in the Wiluna region of
Western Australia. Anglo American had the opportunity to earn 75% interest via staged payments of up to $51m and
the completion of a Bankable Feasibility Study. On 3 April 2014, it was announced that Anglo American had withdrawn
from the EJV due to prolonged delays in access to ground for exploration. Anglo American is responsible for all
rehabilitation required and the tenements under the EJV were surrendered.
Clampton (E77/1591)
The company’s review of the large land holding associated with the Clampton Project identified small targets hoped to
be possibly associated with the “Clampton Shear Zone”. Further fieldwork during the year identified a very low potential
of mineralisation characteristics and no relation to mid-ranged historical mining activities. The company made the
decision in May 2014 to surrender this ground from the company’s portfolio.
Muriels Extension (M37/611, P37/7580 - P37/7587)
During the year, the company completed a review of the data from aeromagnetic surveys and field programs with the
intent to conform historical reports on the area. During this internal and external review, correlations of historic and
new data could not be determined and the recommendations of the review were to stop further work and take steps to
release the project from the company’s portfolio.
5
TABLEOF CONTENTS CONTINUED
DIRECTORS’ REPORT
For personal use only
Your directors present their report on the company and its controlled entities (Group) for the financial year
ended 30 June 2014.
The names of the Directors and Company Secretary in office at any time during or since the end of the year
are:
Glyn Povey
Gary Castledine
Neville Bassett
Brian Williams
Jianhua Sang
Managing Director
Non-executive Chairman
Non-executive Director and Company Secretary
Non-executive Director
Non-executive Director – Resigned 28 November 2013
PRINCIPAL ACTIVITIES
The principal activity of the Group is to identify and acquire interests in and value – add to mineral
exploration and mining opportunities both in Australia and overseas.
REVIEW OF OPERATIONS
Operating Activities
A detailed review of the operations of the Group is contained in the Review of Activities.
New Opportunities
The Company continues to focus on identifying and securing ‘company making’ projects and opportunities.
The Board has adopted a rigorous methodology for screening and reviewing potential projects.
Result
The net loss of the Group after income tax for the year amounted to $13,507,383 (2013: loss of $2,403,094).
The loss for the year included impairment of exploration and evaluation of $3,114,927 (2013: $1,212,449)
and amortisation of capitalised exploration expenditure of $8,648,970 (2013: Nil).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the year, there was no significant change in the state of affairs of the Group other than that referred
to in the financial statements or notes thereto.
The Independent Auditor’s Report on page 19 contains a statement of material uncertainty regarding
continuation as a going concern. For further comment refer to Note 1(x) in the Notes to the Financial
Statements.
6
TABLEOF CONTENTS CONTINUED
EVENTS SUBSEQUENT TO BALANCE DATE
For personal use only
No matters or circumstances have arisen, since the end of the financial year, which significantly affected, or
may significantly affect, the operations of the company, the results of those operations, or the state of
affairs of the company in subsequent financial years, other than:
1.
2.
3.
The company arranged for full repayment of its existing secured debt facility amounting to
$1,550,000, replaced by unsecured convertible notes (Notes). The principle terms of the Notes,
conversion of which will be subjected to shareholders’ approval, are as follows:
Redemption Date:
Conversion Price:
Conversion Period:
12 months from date of issue
the lesser of:
(a) the lowest issue price of Shares during the Conversion Period; or
(b) the price that is 80% of the volume weighted average market price of the
company’s ordinary fully paid shares calculated over the last 5 days on
which sales were recorded before the date of conversion and issue.
A noteholder may convert at any time prior to the Redemption Date.
Interest Rate:
Nil%
The total amount raised from the Notes was $1,850,000.
The Company announced an underwritten pro rata non-renounceable rights issue of ordinary fully
paid shares.
The terms of the offer will be as follows:
Type of Offer:
Pro-rata non-renounceable
Eligible participants:
Shareholders on the Record Date and whose
registered addresses are in Australia or New
Zealand
Basis of entitlement:
One (1) new Share for every three (3) existing
Shares
Number of existing Shares:
303,053,625
Number of new Shares (full subscription):
101,017,875
Record Date to determine entitlements:
To be advised
Issue price:
$0.002 per new share
Funds raised from the issue of $202,035 (before costs) will be used to provide additional working
capital, including for the identification and review of potential investment opportunities.
The company reached agreement with a number of non-related creditors to accept discounted terms
on amounts owing for work undertaken on the bulk sample program at the Gwendolyn Gold Project.
The total amount of discount received was $924,258. The reduced payment amount has not been
accounted for at 30 June 2014.
7
TABLEOF CONTENTS CONTINUED
For personal use only
4.
The company relinquished its interest in the Muriels Extension Project. As a result of the
relinquishment, the company is due a refund from a government authority of approximately
$150,000.
DIVIDENDS
There were no dividends paid or declared during or since the end of the financial year.
LIKELY DEVELOPMENTS
The Group will continue mineral exploration activity on its exploration projects with the objective of
identifying commercial resources.
The company is taking the opportunity to review its entire tenement portfolio and is assessing new project
opportunities that the Board believes will add shareholder value. As part of the review process, the company
may look at possible investment opportunities outside of the company’s existing principal activity of mineral
exploration. Dependant on the nature and scale of any investment, the company may be required, pursuant
to ASX Listing Rules, to obtain shareholder approval to any transaction and to re-comply with the admission
requirements set out in Chapters 1 and 2 of the ASX Listing Rules.
ENVIRONMENTAL REGULATIONS
The Group has a policy of at least complying, but in most cases exceeding, its environmental performance
obligations. No environmental breaches have been notified by any government agency during the year
ended 30 June 2014. The Board believes that the company has adequate systems in place for the
management of its environmental regulations.
DIRECTORS’ QUALIFICATIONS AND EXPERIENCE
Glyn Povey
Managing Director
Mr Glyn Povey was appointed a director of the company on 15 February 2011.
Mr Povey is an experienced senior executive with significant domestic and international experience including
roles as a Senior Project Manager in Hong Kong, Director of Operations for a mineral exploration company,
and Mine Manager for a number of underground and open cut mines in Australia. Mr Povey was previously
Vice-President Operations for Crosslands Resources Ltd, a joint-venture between Murchison Metals Ltd and
Mitsubishi Development Pty Ltd.
Interest in Securities
Mr Povey has a direct interest in 3,225,000 ordinary shares and 9,000,000 unlisted options.
Directorships held in other listed companies over the last 3 years – nil.
8
TABLEOF CONTENTS CONTINUED
DIRECTORS’ QUALIFICATIONS AND EXPERIENCE (continued)
For personal use only
Gary Castledine
Non-executive Chairman
Mr Gary Castledine was appointed a director of the company on 24 February 2009.
Mr Castledine has over 20 years’ experience in stockbroking and capital markets. He was a founding director
and the head of corporate with Indian Ocean Capital in Perth, Western Australia, a specialist boutique
securities dealer and corporate advisory firm. Mr Castleldine is currently director/head of corporate with full
service boutique stockbroking and investment firm CPS Capital Group Pty Ltd, established in June 2013
through the merger of Indian Ocean Capital and CPS Securities. Mr Castledine’s experience has enabled him
to gather an extensive suite of clients in a corporate advisory role which has seen him involved in many
capital raisings and IPOs across a spectrum of industries. He is currently a member of the Stockbrokers
Association of Australia.
Interest in Securities
Mr Castledine has an indirect interest in 4,453,103 ordinary shares and 4,692,857 unlisted options.
Directorships held in other listed companies over the last 3 years:
Mamba Minerals Limited
13 August 2010 to 21 November 2012
Exoma Energy Limited
20 August 2014 to present
Neville Bassett
Non-executive Director
Mr Neville Bassett was appointed a director of the company on 22 April 2010.
Mr Bassett is a chartered accountant operating his own corporate consulting business, specialising in the
area of corporate, financial and management advisory services. Mr Bassett has been involved with
numerous public company listings and capital raisings. His involvement in the corporate arena has also
taken in mergers and acquisitions, and includes significant knowledge and exposure to the Australian
financial markets. Mr Bassett has experience in matters pertaining to the Corporations Act, ASX listing
requirements, corporate taxation and finance.
Interests in Securities
Mr Bassett has an indirect interest in 1,800,000 ordinary shares and 1,200,000 unlisted options.
Directorships held in other listed companies over the last 3 years:
Mamba Minerals Limited
Neurodiscovery Limited
Ram Resources Limited
Kairiki Energy Limited
Meteoric Resources NL
Exoma Energy Limited
13 August 2010 to 13 August 2013
6 August 2010 to 14 March 2012
22 March 2004 to present
28 September 2010 to 31 March 2011
29 November 2012 to present
20 August 2014 to present
9
TABLEOF CONTENTS CONTINUED
DIRECTORS’ QUALIFICATIONS AND EXPERIENCE (continued)
Brian Williams
Non-executive Director
For personal use only
Mr Brian Williams was appointed a director of the company on 15 February 2011.
Mr Williams is experienced as a mining, engineering and infrastructure executive and director with
substantial domestic and international (Asia, Europe and Africa) open pit and underground mine
development and management experience, including project managing some of the largest underground
and open cut gold mines in Western Australia. Mr Williams has held senior management roles at operational
and corporate levels within the resources industry in both private and publicly listed companies.
Interest in Securities
Mr Williams has a direct interest in 2,107,972 ordinary shares and 1,741,486 unlisted options.
Directorships held in other listed companies over the last 3 years – nil.
COMPANY SECRETARY
Mr Neville Bassett held the position of Company Secretary throughout the duration of the financial year.
MEETINGS OF DIRECTORS
During the financial year, 17 meetings of directors were held. Attendances by each Director during the year
were:
Glyn Povey
Gary Castledine
Neville Bassett
Brian Williams
Jianhua Sang
Directors’ Meetings
Number Eligible to Attend
Number Attended
17
17
17
17
17
17
17
17
8
2
NON – AUDIT SERVICES
During the year Grant Thornton Audit Pty Ltd did not perform any other services in addition to their
statutory duties. Information in respect to auditor remuneration is disclosed at Note 7.
AUDITORS’ INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
The Auditor’s Independence Declaration is set out on page 18 and forms part of the Directors’ Report for the
year ended 30 June 2014.
PROCEEDINGS OF BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings against the company, or to intervene in any proceedings to which the company is a part, for the
purpose of taking responsibility on behalf of the company for all or any part of those proceedings.
10
TABLEOF CONTENTS CONTINUED
For personal use only
No proceedings have been brought or intervened in on behalf of the Company under section 237 of the
Corporations Act 2001.
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Directors and other Key Management
Personnel (KMP) of the company in accordance with the Corporations Act 2001 and its regulations. It also
provides the remuneration disclosures required by paragraphs Aus 25.4 to Aus 25.7.2 of AASB 124 Related
Party Disclosures, which have been transferred to the Remuneration Report in accordance with Corporations
Regulation 2M.6.04. These remuneration disclosures have been audited.
For the purposes of this report, Key Management Personnel of the company are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the
Company, directly or indirectly. The Company did not have any other key management personnel other than
its Directors.
For the purposes of this Remuneration Report, the term ‘Executive’ encompasses all Directors and the
Company Secretary of the company.
Remuneration Philosophy
The performance of the company depends upon the quality of its Directors and Executives. To prosper, the
company must attract, motivate and retain highly skilled Directors and Executives.
To this end, the company embodies the following principles in its remuneration framework:
‘The Board as a whole is responsible for considering remuneration policies and packages applicable both to
board members and senior executives of the company. The Board remuneration policy is to ensure the
remuneration package, which is not linked to the performance of the company, properly reflects the person’s
duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating
people of the highest quality.’
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive director and senior
manager remuneration is separate and distinct.
Non-executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the company with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive
directors shall be determined from time to time by a general meeting. An amount not exceeding the
amount determined is then divided between the Directors as agreed. The current aggregate remuneration is
$250,000 per year.
11
TABLEOF CONTENTS CONTINUED
REMUNERATION REPORT (AUDITED) (continued)
For personal use only
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst Directors is reviewed annually. The Board considers advice from external consultants
as well as the fees paid to non-executive Directors of comparable companies when undertaking the annual
review process. Each director receives a fee for being a Director of the company.
Non-executive Directors are encouraged by the Board to hold shares in the company. It is considered good
governance for directors to have a stake in the Company on whose board he or she sits.
The remuneration of Non-executive Directors for the period ended 30 June 2014 is detailed on page 15.
Managing Director and Executive Remuneration Structure
Based on the current stage in the company’s development, its size, structure and strategies, the Board
considers that the key performance indicator in assessing the performance of Executives and their
contribution towards increasing shareholder value is share price performance over the review period.
Individual and company operating targets associated with traditional financial and non-financial measures
are difficult to set given the small number of Executives and their need to be flexible and multi-tasked, as the
company responds to a continually changing business environment. Consequently, a formal process of
defining Key Performance Indicators (KPI’s) and setting targets against the KPI’s has not been adopted at the
present time.
The proportion of fixed remuneration and variable remuneration is established for each Executive by the
Board.
Fixed Remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration, which is both
appropriate to the position and is competitive in the market. Fixed remuneration is reviewed annually by
the Board; having regard to the Company and individual performance, relevant comparable remuneration in
the mining exploration industry and external advice. Executives receive their fixed remuneration in cash.
Variable Remuneration – Short-Term Incentive (STI)
The objective of the STI is to link the achievement of corporate and operational objectives over the year with
the remuneration received by the Executives charged with achieving that increase. The total potential STI
available is set at a level so as to provide sufficient incentive to the Executives to achieve the performance
goals and such that the cost to the company is reasonable in the circumstances.
Annual STI payments granted to each Executive depend on their performance over the preceding year and
are based on recommendations from the Chief Executive Officer and/or the Chairman following
collaboration with the Board. Typically included are measures such as contribution to strategic initiatives,
risk management and leadership/team contribution.
The aggregate of annual STI payments available for Executives across the company is subject to the approval
of the Board. Payments are usually delivered as a cash bonus. There were no STI payments made during the
financial year.
12
TABLEOF CONTENTS CONTINUED
REMUNERATION REPORT (AUDITED) (continued)
Variable Remuneration – Long-Term Incentive (LTI)
For personal use only
The objective of the LTI plan is to reward Executives in a manner, which aligns the element of remuneration
with the creation of shareholder wealth. As such LTI’s are made to Executives who are able to influence the
generation of shareholder wealth and thus have an impact on the company’s performance.
The level of LTI granted is, in turn, dependent on a number of factors including, the seniority of the Executive
and the responsibilities the Executive assumes in the company.
LTI grants to Executives are delivered in the form of options. These options are issued at an exercise price
determined by the Board at the time of issue.
Typically, the grant of LTIs occurs at the commencement of employment or in the event that the individual
receives a promotion and, as such, is not subsequently affected by the individual’s performance over time.
However, under certain circumstances, including breach of employment conditions, the Directors may cause
the options to expire prior to their vesting date. In addition, individual performance is more commonly
rewarded over time by STIs.
No LTI options were issued during the financial year.
The Managing Director Mr Glyn Povey’s executive service contract expired in February 2014 and an
extension of the contract is in place.
Managing Director Executive Services Contract
The material terms of the Managing Director’s Executive Service Contract in summary are:
• Fixed remuneration:
o
$100,000 (reduced down from $350,000 per annum in April 2013) per year plus 9%
superannuation;
• Variable remuneration:
o
Short-term incentives (STI) – up to 20% bonus on base annual salary upon successful
achievement of the KPI’s (to be agreed and ratified by the board); and
o
Long-term incentives (LTI)
First Performance Hurdle (identification of 200,000oz JORC resource) - 2,000,000 options,
exercisable at 20 cents expiring 3 years from date of issue
Second Performance Hurdle (identification of 400,000oz JORC resource) - 2,000,000
options exercisable at 20 cents expiring 3 years from date of issue
Third Performance Hurdle (Pre-Feasibility Study in relation to any of the company
projects) - 4,000,000 options exercisable at 20 cents expiring 4 years from date of issue
• Termination of Employment
o
The initial term of the contract is for 36 months commencing on 14 February 2011. The
contract expired on 14 February 2014. An extension of contract is in place.
13
TABLEOF CONTENTS CONTINUED
REMUNERATION REPORT (AUDITED) (continued)
The contract may be terminated by the Company with 6 months written notice or by the
Managing Director by giving 3 months written notice.
For personal use only
o
The contract lapsed on 14 February 2014. The Managing Director now invoices on a month to month at the
same rate of $100,000 per annum when based at the Perth office and at a rate of $2,500 per day when
based on-site.
Other Executive Benefits
There are fringe benefits through the provision of company parking bays.
14
TABLEOF CONTENTS CONTINUED
REMUNERATION REPORT (AUDITED) (continued)
For personal use only
Remuneration of key management personnel and the five highest paid executives of the Group
Remuneration for the year ended 30 June 2014 and 2013
2014
Short-Term
Directors
Year
G Castledine
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
G Povey
N Bassett
B Williams
J Sang
D O’Reilly
R Hyndes
A Mendoza
Total
PostEmploy
ment
Share
based
Paymen
t
Consulting
Fees
Directors
Fees
Wages &
Salaries
Superannuati
on
Options
$
$
$
$
$
15,000
15,000
40,000
40,000
40,000
40,000
16,667
93,333
31,250
5,069
111,667
224,652
143,273
¹215,521
166,376
143,273
381,897
25,000
25,000
266,878
36,000
36,000
3,000
3,042
327,878
67,042
13,253
24,000
14,974
13,253
38,974
-
Total
Performa
nce
Related
$
%
40,000
40,000
423,404
239,521
76,000
76,000
40,000
40,000
16,667
96,333
31,250
8,111
181,350
596,071
712,565
-
¹Glyn Povey’s employment contract was amended during the 2013 financial year. Part of the amendment removed entitlement to be
paid out of days in lieu. Glyn Povey’s wages and salary of $215,521 for 2013 financial year is made up of salary of $266,667 minus
loss of days in lieu of $51,156.
15
REMUNERATION REPORT (AUDITED) (continued)
For personal use only
Details of the director-related entities that received the consulting fees are:
Neville Bassett
Glyn Povey
Mandevilla Pty Ltd
Lost State Pty Ltd
Compensation Options Granted and vested during the year as part of emoluments
No compensation options were issued to Key Management Personnel or Specified Executives during the year
(2013: Nil).
Shareholdings – 2014
Number of Shares held by Directors and Specified Executives:
Directors
Balance
Received as
Options
01.07.2013
Remuneration
Exercised
Glyn Povey
3,225,000
Gary Castledine
4,216,071
Neville Bassett
1,800,000
Brian Williams
2,343,472
Jianhua Sang¹
Total
11,584,543
-
Net Change
Other*
237,032
(235,500)
1,532
Balance
30.06.2014
3,225,000
4,453,103
1,800,000
2,107,972
11,586,075
Balance
30.06.2014
9,000,000
4,692,857
1,200,000
1,741,486
16,634,343
Number Vested /
Exercisable
9,000,000
4,692,857
1,200,000
1,741,486
16,634,343
*Net Change Other refers to shares purchased or sold during the financial year.
¹Jianhua Sang resigned from the board on 28 November 2013.
Option holdings – 2014
Number of Options held by Directors and specified Executives:
Directors
Balance
Received as Net Change
01.07.2013
Remuneration
Other*
Glyn Povey
9,000,000
Gary Castledine
4,692,857
Neville Bassett
1,200,000
Brian Williams
1,741,486
Jianhua Sang¹
Total
16,634,343
*Net Change Other refers to options purchased, sold or expired during the financial year.
¹Jianhua Sang resigned from the board on 28 November 2013.
16
REMUNERATION REPORT (AUDITED) (continued)
No options were exercised during the year by the Directors.
For personal use only
As at 30 June 2014, 150,107,260 listed options (2013: 150,107,260) and 12,000,000 unlisted options (2013:
12,000,000) are on issue.
Transactions with directors’ personally related entities
There were no transactions with specified Directors and Executives and their personally related entities
other than those detailed in Note 23 to the Financial Statements.
END OF AUDITED REMUNERATION REPORT
INDEMNIFYING AND INSURANCE OF DIRECTORS AND OFFICERS
During the current financial year, the company paid a premium to insure the directors and officers of the
company against liabilities of costs and expenses incurred by them in defending any legal proceedings arising
out of their conduct whilst acting in the capacity of directors or officers of the company. The company paid
$19,397 (2013: $15,207) in respect to premiums to insure the directors and other officers of the company.
OPTIONS AND UNISSUED SHARES UNDER OPTIONS
At the date of this report, 150,107,260 listed options and 12,000,000 unlisted options (2013: 150,107,260
listed options and 12,000,000 unlisted options) have been issued by the company and the number of
unissued ordinary shares of the company under option is 162,107,260 (2013: 162,107,260).
There have been no issue of ordinary shares as a result of the exercise of options during or since the end of
the financial year.
Optionholders do not have any rights to participate in any issues of shares or other interests in the company
or any other entity.
Signed in accordance with a resolution of the Board of Directors.
Gary Castledine
Chairman
DATED at PERTH this 30 September 2014
17
For personal use only
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E [email protected]
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Vector Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Vector Resources Limited for the year ended 30 June 2014, I declare
that, to the best of my knowledge and belief, there have been:
a
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
b
no contraventions of any applicable code of professional conduct in relation to the
audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J W Vibert
Partner - Audit & Assurance
Perth, 30 September 2014
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
18
For personal use only
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
PO Box 570
West Perth WA 6872
Independent Auditor’s Report
To the Members of Vector Resources Limited
T +61 8 9480 2000
F +61 8 9322 7787
E [email protected]
W www.grantthornton.com.au
Report on the financial report
We have audited the accompanying financial report of Vector Resources Limited (the
“Company”), which comprises the consolidated statement of financial position as at 30 June
2014, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for
the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information and the directors’ declaration of the consolidated entity
comprising the Company and the entities it controlled at the year’s end or from time to time
during the financial year.
Directors’ responsibility for the financial report
The Directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require us to comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
19
For personal use only
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Auditor’s opinion
In our opinion:
a
b
the financial report of Vector Resources Limited is in accordance with the
Corporations Act 2001, including:
i
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2014 and of its performance for the year ended on that date; and
ii
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Emphasis of matter
Without qualifying our opinion, we draw attention to Note 1 (x) to the financial report
which indicates that the company incurred a net loss of $13,507,383 during the year ended
30 June 2014 and, as of that date, the company’s current liabilities exceeded its current assets
by $2,242,698. These conditions, along with other matters as set forth in Note 1(x), indicate
the existence of a material uncertainty which may cast significant doubt about the
consolidated entity’s ability to continue as a going concern and therefore, the consolidated
entity may be unable to realise its assets and discharge its liabilities in the normal course of
business, and at the amounts stated in the financial report.
20
For personal use only
Report on the remuneration report
We have audited the remuneration report included in pages 11 to 17 of the directors’ report
for the year ended 30 June 2014. The Directors of the Company are responsible for the
preparation and presentation of the remuneration report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Vector Resources Limited for the year ended 30
June 2014, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
J W Vibert
Partner - Audit & Assurance
Perth, 30 September 2014
21
DIRECTORS’ DECLARATION
For personal use only
The Directors of the company declare that:
1. The attached financial statements and notes are in accordance with the Corporations Act 2001, and:
a.
b.
c.
Comply with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001;
Give a true and fair view of the financial position as at 30 June 2014 and of the performance for
the year ended on that date of the Group; and
Comply with International Financial Reporting Standards as disclosed in Note 1.
2. In the Directors’ opinion there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable.
3. The Chief Executive Officer and Chief Financial Officer have provided the following declaration
required by section 295A of the Corporations Act 2001:
a.
b.
c.
The financial records of the company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
The financial statements, and the notes for the financial year comply with the Accounting
Standards; and
The financial statements and notes for the financial year give a true and fair view.
This declaration is made in accordance with a resolution of the Board of Directors.
Gary Castledine
Chairman
DATED this 30 September 2014
22
For personal use only
CONSOLIDATED STATEMENT OF PROFIT OF LOSS AND OTHER COMPREHENSIVE INCOME
Note
4a
4b
Gold sales
Cost of sales
Gross profit (loss)
Other Income
Employee benefits expense
Consulting fees
Administration expenses
Depreciation expense
Finance Costs
Impairment of exploration and evaluation
Impairment of financial assets
Occupancy costs
Directors fees
Other expenses from ordinary activities
Loss on sale of investment
Loss before tax
Income tax
Loss for the year
Other comprehensive income
Other comprehensive income for the year,
net of tax
Total comprehensive loss for the year
Loss for the year Attributable to:
Members of the parent entity
Other comprehensive loss for the year
attributable to:
Members of the parent entity
Basic loss per Share
Diluted loss per Share
4c
5
6
Year Ended
30 June 2014
$
1,134,812
(10,786,388)
(9,651,576)
Consolidated
Year Ended
30 June 2013
$
-
27,668
(103,056)
(80,575)
(164,603)
(13,909)
(165,000)
(3,114,927)
1,630
(19,942)
(100,250)
(122,843)
(13,507,383)
(13,507,383)
59,485
(169,760)
(277,770)
(297,171)
(37,961)
(1,212,449)
(9,099)
(25,515)
(160,958)
(270,701)
(1,195)
(2,403,094)
(2,403,094)
-
-
(13,507,383)
(2,403,094)
(13,507,383)
(13,507,383)
(2,403,094)
(2,403,094)
(13,507,383)
(2,403,094)
(0.045)
(0.045)
(0.012)
(0.012)
The accompanying notes form part of these financial statements.
23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For personal use only
Consolidated
As at
30 June 2014
$
As at
30 June 2013
$
8
9
10
1,170,714
526,570
3,257,977
4,955,261
1,016,796
268,093
1,284,889
11
12
13
128,423
4,479
6,383,533
6,516,435
11,471,696
237,281
2,850
16,752,514
16,992,645
18,277,534
14
15
16
5,528,379
1,650,000
19,580
7,197,959
7,197,959
419,944
76,470
496,414
496,414
4,273,737
17,781,120
24,947,264
2,502,913
(23,176,440)
4,273,737
24,947,264
2,502,913
(9,669,057)
17,781,120
Note
Assets
Current Assets
Cash and cash equivalents
Other receivables
Inventories
Total Current Assets
Non-Current Assets
Property, plant & equipment
Financial assets
Exploration and evaluation expenditure assets
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Share Capital
Reserves
Accumulated Losses
Total Equity
17
18
The accompanying notes form part of these financial statements.
24
CONSOLIDATED STATEMENT OF CASH FLOWS
1,148,562
32,013
(679,564)
(688,265)
(187,254)
53,875
(1,223,036)
(1,169,161)
Cash Flow from Investing Activities
Payments for exploration, evaluation and
development
Payments for property, plant & equipment
Net Cash Used in Investing Activities
(1,277,977)
(10,681)
(1,288,658)
(5,049,363)
(56,605)
(5,105,968)
Cash Flow from Financing Activities
Finance Costs
Proceeds from borrowings
Proceeds from issue of shares
Share issue costs
Net Cash Provided by Financing Activities
(10,000)
1,650,000
(10,170)
1,629,830
6,181,571
(362,213)
5,819,358
Net Increase (Decrease) in Cash Held
Cash at the Beginning of the Year
Cash at the End of the Year
153,918
1,016,796
1,170,714
(455,771)
1,472,567
1,016,796
For personal use only
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
Note
Cash Flow from Operating Activities
Receipts from customers
Interest received
Payment to suppliers and employees
Payments for production
Net Cash Used in Operating Activities
20
8
The accompanying notes form part of these financial statements.
25
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Issued
Capital
$
Option
Reserve
$
Accumulated
Losses
$
Consolidated
Balance as at 30 June 2012
Loss for the period
Proceeds from share issue
Employee share based payments
Broker share based payment
Share issue expenses
Balance as at 30 June 2013
19,757,534
5,593,665
(403,935)
24,947,264
1,577,903
880,167
44,843
2,502,913
(7,265,963)
(2,403,094)
(9,669,057)
14,069,474
(2,403,094)
5,593,665
880,167
44,843
(403,935)
17,781,120
Balance as at 30 June 2013
Loss for the period
Balance as at 30 June 2014
24,947,264
24,947,264
2,502,913
2,502,913
(9,669,057)
(13,507,383)
(23,176,440)
17,781,120
(13,507,383)
4,273,737
Total
$
The accompanying notes form part of these financial statements.
26
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
CORPORATE INFORMATION
The consolidated general purpose financial statements of the Group have been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. Compliance with Australian Accounting
Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB). Vector Resources Limited is a for-profit entity for the
purpose of preparing the financial statements.
Vector Resources Limited (Vector or the company) is a public company incorporated and domiciled in
Australia. The address of its registered office and its principal place of business is Suite 4, Henry James
Building, 8 Alvan Street, Subiaco, Western Australia.
The consolidated financial statements for the year ended 30 June 2014 were approved and authorised for
issue by the board of directors on 30 September 2014.
The principal activity of the company is exploration for minerals.
1.
Summary of Significant Accounting Policies
This financial report includes the consolidated financial statement and notes of Vector Resources
Limited and Controlled Entities (the “Group” or “Consolidated Entity”).
a. Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with
the Australian Accounting Standards, Australian Accounting Interpretations, other authoritative
announcements of the Australian Accounting Standards Board (the “AASB”) and the Corporations
Act 2001.
Australian Accounts Standards set out accounting policies that the AASB has concluded would result
in a financial report containing relevant and reliable information about transactions, events and
conditions to which they apply. Compliance with Australian Accounting Standards ensures that the
financial statements and notes also comply with International Financial Reporting Standards.
Material accounting policies adopted in the preparation of this financial report are presented below.
They have consistently been applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs,
modified, where applicable, by the measurement of fair value of selected non-current assets,
financial assets and financial liabilities.
This financial report is presented in Australian dollars.
27
Summary of Significant Accounting Policies (continued)
For personal use only
b. New Accounting Standards that are effective for these financial statements
A number of new and revised standards are effective for annual periods beginning on or after 1 July
2013. Information on these new standards is presented below.
AASB 11 Joint Arrangements
AASB 11 supersedes AASB 131 Interests in Joint Ventures (AAS 131) and AASB Interpretation 113
Jointly Controlled Entities- Non-Monetary-Contributions by Venturers. AASB 11 revises the categories
of joint arrangement, and the criteria for classification into the categories, with the objective of more
closely aligning the accounting with the investor’s rights and obligations relating to the arrangement.
In addition, AASB 131’s option of using proportionate consolidation for arrangements classified as
jointly controlled entities under that Standard has been eliminated. AASB 11 now requires the use of
the equity method for arrangements classified as joint ventures (as for investments in associates).
AASB 12 Disclosure of interest in Other Entities
AASB 12 integrates and makes consistent the disclosure requirements for various types of
investments, including unconsolidated structured entities. It introduces new disclosure requirements
about the risks to which an entity is exposed from its involvement with structured entities.
c. New Accounting Standards for Application in future periods
The AASB has issued a number of new and amended Accounting Standards and Interpretations that
have mandatory application dates for future reporting period, some of which are relevant to the
company/Group. The company/Group has decided not to early adopt any of the new and amended
pronouncements. The company’s/Group’s assessment of the new and amended pronouncements
that are relevant to the company/Group but applicable in future reporting periods is set out below:
AASB 9 Financial Instruments
AASB 9 introduces new requirements for the classification and measurement of financial assets and
liabilities. These requirements improve and simplify the approach for classification and measurement
of financial assets compared with the requirements of AASB 139.
Effective date - annual reporting periods beginning on or after 1 January 2018.
The entity has not yet assessed the full impact of AASB 9 as this standard does not apply mandatorily
before 1 January 2018 and the IASB is yet to finalise the remaining phases of its project to replace IAS
39 Financial Instruments: Recognition and Measurement (AASB 139 in Australia).
AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and
Financial Liabilities
AASB 2012-3 adds application guidance to AASB 132 to address inconsistencies identified in applying
some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a
legally enforceable right of set-off” and that some gross settlement systems may be considered
equivalent to net settlement.
Effective date - annual reporting periods beginning on or after 1 January 2014.
When AASB 2012-3 is first adopted for the year ending 30 June 2015, there will be no impact on the
entity as this standard merely clarifies existing requirements in AASB 132.
28
For personal use only
Summary of Significant Accounting Policies (continued)
AASB 2013-3 Recoverable Amount Disclosures for Non-Financial Assets
These narrow-scope amendments address disclosure of information about the recoverable amount of
impaired assets if that amount is based on fair value less costs of disposal. When developing IFRS 13
Fair Value Measurement, the IASB decided to amend IAS 36 Impairment of Assets to require
disclosures about the recoverable amount of impaired assets. The IASB noticed however that some of
the amendments made in introducing those requirements resulted in the requirement being more
broadly applicable than the IASB had intended. These amendments to IAS 36 therefore clarify the
IASB’s original intention that the scope of those disclosures is limited to the recoverable amount of
impaired assets that is based on fair value less costs of disposal. AASB 2013-3 makes the equivalent
amendments to AASB 136 Impairment of Assets.
Effective date - annual reporting periods beginning on or after 1 January 2014.
When these amendments are first adopted for the year ending 30 June 2015, they are unlikely to
have any significant impact on the entity given that they are largely of the nature of clarification of
existing requirements.
AASB 2013-4 Amendments to Australian Accounting Standards – Novation of Derivatives and
Continuation of Hedge Accounting
The amendments in AASB 2013-5 provide an exception to consolidation to investment entities and
require them to measure unconsolidated subsidiaries at fair value through profit or loss in
accordance with AASB 9 Financial Instruments (or AASB 139 Financial Instruments: Recognition and
Measurement where AASB 9 has not yet been adopted). The amendments also introduce new
disclosure requirements for investment entities that have subsidiaries.
These amendments apply to investment entities, whose business purpose is to invest funds solely for
returns from capital appreciation, investment income or both.
Effective date - annual reporting periods beginning on or after 1 January 2014.
When these amendments are first adopted for the year ending 30 June 2015, they are unlikely to
have any significant impact on the entity.
AASB 2013-7 Amendments to AASB 1038 arising from AASB 10 in relation to Consolidation and
Interests of Policyholders
AASB 2013-7 removes the specific requirements in relation to consolidation from AASB 1038 Life
Insurance Contracts, which leaves AASB 10 Consolidated Financial Statements as the sole source for
consolidation requirements applicable to life insurer entities.
Effective date - annual reporting periods beginning on or after 1 January 2014.
When this standard is first adopted for the year ending 30 June 2015, there will be no impact on the
entity because the parent entity does not meet the definition of ‘investment entity’.
29
For personal use only
Summary of Significant Accounting Policies (continued)
AASB 1031 Materiality (December 2013)
The revised AASB 1031 is an interim standard that cross-references to other Standards and the
Framework for the Preparation and Presentation of Financial Statements (issued December 2013)
that contain guidance on materiality. The AASB is progressively removing references to AASB 1031 in
all Standards and Interpretations, and once all these references have been removed, AASB 1031 will
be withdrawn.
Effective date - annual reporting periods beginning on or after 1 January 2014.
When these amendments are first adopted for the year ending 30 June 2015, they are unlikely to
have any significant impact on the entity.
AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework,
Materiality and Financial Instruments (Part B: Materiality)
Part B of AASB 2013-9 deletes references to AASB 1031 in various Australian Accounting Standards
(including Interpretations).
Effective date - annual reporting periods beginning on or after 1 January 2014.
When the revised AASB 1031 is first adopted for the year ending 30 June 2015, it is unlikely to have
any significant impact on the entity.
AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework,
Materiality and Financial Instruments (Part C: Financial Instruments)
These amendments:
• add a new chapter on hedge accounting to AASB 9 Financial Instruments, substantially
overhauling previous accounting requirements in this area;
• allow the changes to address the so-called ‘own credit’ issue that were already included in AASB
9 to be applied in isolation without the need to change any other accounting for financial
instruments; and
• defer the mandatory effective date of AASB 9 from ‘1 January 2015’ to ‘1 January 2017’.
Effective date - annual reporting periods beginning on or after 1 January 2015.
The entity has not yet assessed the full impact of these amendments.
AASB 14 Regulatory Deferral Accounts
AASB 14 permits first-time adopters of Australian Accounting Standards who conduct rate-regulated
activities to continue to account for amounts related to rate regulation in accordance with their
previous GAAP. Accordingly, an entity that applies AASB 14 may continue to apply its previous GAAP
accounting policies for the recognition, measurement, impairment and derecognition of its regulatory
deferral account balances. This exemption is not available to entities who already apply Australian
Accounting Standards.
Effective date - annual reporting periods beginning on or after 1 January 2016.
When AASB 14 becomes effective for the first time for the year ending 30 June 2017, it will not have
any impact on the entity.
30
For personal use only
Summary of Significant Accounting Policies (continued)
AASB 2014-1 Amendments to Australian Accounting Standards (Part A: Annual Improvements
2010–2012 and 2011–2013 Cycles)
Part A of AASB 2014-1 makes amendments to various Australian Accounting Standards arising from
the issuance by the International Accounting Standards Board (IASB) of International Financial
Reporting Standards Annual Improvements to IFRSs 2010-2012 Cycle and Annual Improvements to
IFRSs 2011-2013 Cycle.
Among other improvements, the amendments arising from Annual Improvements to IFRSs 2010-2012
Cycle:
(a) clarify that the definition of a ‘related party’ includes a management entity that provides key
management personnel services to the reporting entity (either directly or through a group
entity); and
(b) amend AASB 8 Operating Segments to explicitly require the disclosure of judgements made by
management in applying the aggregation criteria.
Among other improvements, the amendments arising from Annual Improvements to IFRSs 20112013 Cycle clarify that an entity should assess whether an acquired property is an investment
property under AASB 140 Investment Property and perform a separate assessment under AASB 3
Business Combinations to determine whether the acquisition of the investment property
constitutes a business combination.
When these amendments are first adopted for the year ending 30 June 2015, there will be no
material impact on the entity.
AASB 2014-1 Amendments to Australian Accounting Standards (Part B: Defined Benefit Plans:
Employee Contributions (Amendments to AASB 119))
Part B of AASB 2014-1 makes amendments to AASB 119 Employee Benefits to incorporate the IASB’s
practical expedient amendments finalised in International Financial Reporting Standard Defined
Benefit Plans: Employee Contributions (Amendments to IAS 19) in relation to the requirements for
contributions from employees or third parties that are linked to service.
The amendments clarify that if the amount of the contributions is independent of the number of
years of service, an entity is permitted to recognise such contributions as a reduction in the service
cost in the period in which the related service is rendered, instead of attributing the contributions to
the periods of service. In contrast, if the amount of the contributions is dependent on the number of
years of service, an entity is required to attribute those contributions to periods of service using the
same attribution method required by paragraph 70 of AASB 119 for the gross benefit.
Effective date - annual reporting periods beginning on or after 1 July 2014.
When these amendments are first adopted for the year ending 30 June 2015, there will be no
material impact on the entity.
AASB 2014-1 Amendments to Australian Accounting Standards (Part C: Materiality)
Part C of AASB 2014-1 makes amendments to particular Australian Accounting Standards to delete
their references to AASB 1031 Materiality, which historically has been referenced in each Australian
Accounting Standard.
Effective date - annual reporting periods beginning on or after 1 July 2014.
31
Summary of Significant Accounting Policies (continued)
For personal use only
When these amendments are first adopted for the year ending 30 June 2015, there will be no
material impact on the entity.
AASB 2014-1 Amendments to Australian Accounting Standards (Part D: Consequential
Amendments arising from AASB 14)
Part D of AASB 2014-1 makes consequential amendments arising from the issuance of AASB 14.
Effective date - annual reporting periods beginning on or after 1 January 2016.
When these amendments become effective for the first time for the year ending 30 June 2017, they
will not have any impact on the entity.
AASB 2014-1 Amendments to Australian Accounting Standards (Part E: Financial Instruments)
Part E of AASB 2014-1 makes amendments to Australian Accounting Standards to reflect the AASB’s
decision to defer the mandatory application date of AASB 9 Financial Instruments to annual reporting
periods beginning on or after 1 January 2018. Part E also makes amendments to numerous Australian
Accounting Standards as a consequence of the introduction of Chapter 6 Hedge Accounting into AASB
9 and to amend reduced disclosure requirements for AASB 7 Financial Instruments: Disclosures and
AASB 101 Presentation of Financial Statements.
Effective date - annual reporting periods beginning on or after 1 January 2015.
The entity has not yet assessed the full impact of these amendments.
IFRS 15 Revenue from Contracts with Customers
IFRS 15:
• replaces IAS 18 Revenue, IAS 11 Construction Contracts and some revenue-related
Interpretations
• establishes a new control-based revenue recognition model
• changes the basis for deciding whether revenue is to be recognised over time or at a point in
time
• provides new and more detailed guidance on specific topics (e.g., multiple element
arrangements, variable pricing, rights of return, warranties and licensing)
• expands and improves disclosures about revenue
In the Australian context, the Australian Accounting Standards Board (AASB) is expected to issue
the equivalent Australian Standard (AASB 15 Revenue from Contracts with Customers), along
with a new Exposure Draft (ED) on income from transactions of Not-for-Profit (NFP) entities by
September 2014.
Effective date - annual reporting periods beginning on or after 1 January 2017.
When this standard is first adopted for the year ending 30 June 2018, there will be no material
impact on the transactions and balances recognised in the financial statements.
Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and
IAS 38)
The amendments to IAS 16 prohibit the use of a revenue-based depreciation method for property,
plant and equipment. Additionally, the amendments provide guidance in the application of the
diminishing balance method for property, plant and equipment.
32
For personal use only
Summary of Significant Accounting Policies (continued)
The amendments to IAS 38 present a rebuttable presumption that a revenue-based amortisation
method for intangible assets is inappropriate. This rebuttable presumption can be overcome (i.e. a
revenue-based amortisation method might be appropriate) only in two limited circumstances:
•
•
the intangible asset is expressed as a measure of revenue, for example when the predominant
limiting factor inherent in an intangible asset is the achievement of a revenue threshold (for
instance, the right to operate a toll road could be based on a fixed total amount of revenue to be
generated from cumulative tolls charged); or
when it can be demonstrated that revenue and the consumption of the economic benefits of the
intangible asset are highly correlated.
The Australian Accounting Standards Board (AASB) is expected to issue the equivalent Australian
amendment shortly.
Effective date - annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no
material impact on the transactions and balances recognised in the financial statements.
Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)
The amendments to IFRS 11 state that an acquirer of an interest in a joint operation in which the
activity of the joint operation constitutes a ‘business’, as defined in IFRS 3 Business Combinations,
should:
• apply all of the principles on business combinations accounting in IFRS 3 and other IFRSs except
principles that conflict with the guidance of IFRS 11. This requirement also applies to the
acquisition of additional interests in an existing joint operation that results in the acquirer
retaining joint control of the joint operation (note that this requirement applies to the additional
interest only, i.e. the existing interest is not remeasured) and to the formation of a joint
operation when an existing business is contributed to the joint operation by one of the parties
that participate in the joint operation; and
• provide disclosures for business combinations as required by IFRS 3 and other IFRSs.
The Australian Accounting Standards Board (AASB) is expected to issue the equivalent Australian
amendment shortly.
Effective date - annual reporting periods beginning on or after 1 January 2016.
When these amendments are first adopted for the year ending 30 June 2017, there will be no
material impact on the transactions and balances recognised in the financial statements.
d. Operating Segments
Operating segments are identified and segment information disclosed on the basis of internal
reports that are regularly provided to, or reviewed by the company’s chief operating decision maker
which, for the company, is the Board of Directors. In this regard, such information is provided using
similar measures to those used in preparing the Statement of Comprehensive Income and Statement
of Financial Position. Refer to Note 19 for Segmental Information. The company operates only in the
exploration industry in Australia.
33
Summary of Significant Accounting Policies (continued)
For personal use only
e. Foreign Currency Translation
i.
Functional and Presentation Currency
Both the functional and presentation currency of the Company and the Group entities is
Australian dollars (A$).
ii.
Transactions and Balances
Transactions in foreign currencies are initially recorded in the functional currency by applying
the exchange rates ruling at the date of transaction. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of exchange at the Consolidated
Statement of Financial Position date.
f. Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any impairment
losses.
Costs include expenditures that are directly attributable to the acquisition of the asset.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will
flow to the company and its cost can be measured reliably. The costs of the day-to-day servicing of
property, plant and equipment are recognised in profit and loss as incurred.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as
follows:
Plant, equipment and computers
Building improvements
Motor vehicles
i.
3 to 5 years
7 years
7 years
Impairment
The carrying value of property, plant, equipment and motor vehicles are reviewed for
impairment when events or changes in circumstances indicate the carrying value may not be
recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount
is determined for the cash-generating unit to which the asset belongs.
If any such indication exists and where the carrying values exceed the estimated recoverable
amount, the assets or cash-generating unit to which the assets belong are written down to
their recoverable amount.
ii.
De-recognition
An item of property, plant, equipment or motor vehicle is de-recognised upon disposal or
when no future economic benefits are expected to arise from the continued use of the asset.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount of the item) is included in the Consolidated
Statement of Comprehensive Income in the period the item is de-recognised.
34
Summary of Significant Accounting Policies (continued)
For personal use only
g. Exploration and Evaluation Expenditure
Expenditure on acquisition, exploration and evaluation relating to an area of interest is carried
forward at cost where rights to tenure of the area of interest are current and:
•
It is expected that expenditure will be recouped through successful development and
exploitation of the area of interest or alternatively by its sale; and/or
•
Exploration and evaluation activities are continuing in the area of interest but at balance date
have not yet reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest. Where uncertainty exists as to
the future viability of certain areas, the value of the area of interest is written off or impaired to
profit and loss.
h. Impairment of Non-financial Assets
At each reporting date, the company assesses whether there is any indication that a non-financial
asset may be impaired. Where an indicator of impairment exists, the company makes a formal
estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable
amount the asset is considered impaired and is written down to its recoverable amount.
The recoverable amount of plant, equipment, exploration and evaluation expenditure is the higher
of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use
can be estimated to be close to its fair value.
An assessment is also made at each reporting date as to whether there is any indication that a
previously recognised impairment loss may no longer exist or may have decreased. If such indication
exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed
only if there has been a change in the estimates used to determine the asset’s recoverable amount
since the last impairment loss was recognised. If that is the case the carrying amount of the asset is
increased to its recoverable amount. That increased amount cannot exceed that carrying amount
that would have been determined, net of depreciation, had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal
the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount,
less any residual value, on a systematic basis over its remaining useful life.
35
Summary of Significant Accounting Policies (continued)
For personal use only
i. Cash and Cash Equivalents
Cash and cash equivalents in the Consolidated Statement of Financial Position comprise cash at bank
and in hand and short-term deposits with an original maturity of three (3) months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of change
in value.
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of
cash and cash equivalents defined above, net of outstanding bank overdrafts. Bank overdrafts are
included within interest bearing loans and borrowings in the current liabilities on the Consolidated
Statement of Financial Position.
j. Trade and Other Receivables
Trade and other receivables, which generally have 30 – 90 day terms, are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest rate method, less an
allowance for any uncollectible amounts.
Collectability of trade and other receivables is reviewed on an ongoing basis. Debts known to be
uncollectible are written off when identified. A provision for impairment is raised when there is
objective evidence that the company will not be able to collect the debts.
k. Available-for-Sale Financial Assets
Available for sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such
by management. They comprise of investments in the equity of other entities where there is neither
a fixed maturity nor fixed or determinable payments.
Available-for-sale financial assets are included in non-current assets, except for those which are
expected to mature within 12 months after the end of the reporting period. (All other financial
assets are classified as Current Assets.) The fair values for the available for sale assets are
determined by the market price of the equities at balance date (see Note 12).
l. Trade and Other Payables
Trade payables and other payables are carried at amortised cost. They represent liabilities for goods
and services provided to the company prior to the end of the financial year that are unpaid and arise
when the company becomes obliged to make future payments in respect of the purchase of these
goods and services. The amounts are unsecured and usually paid within 30 days of recognition.
m. Interests in Joint Venture Operations
Interest in joint-venture operations, where material, are brought to account by including in the
respective classifications, the Group’s share of the individual assets employed and liabilities and
expenses incurred.
Details of interests in joint-ventures are shown at Note 27.
36
Summary of Significant Accounting Policies (continued
For personal use only
n. Leases
Leases are classified at their inception as either operating or finance leases based on the economic
substance of the agreement so as to reflect the risks and benefits incidental to ownership.
o. Operating Leases
The minimum lease payments of operating leases, where the lessor effectively retains substantially
all of the risks and benefits of ownership of the leased item, are recognised as an expense in profit
and loss on a straight-line basis over the lease term.
p. Gold Sales
Gold sales are measured at the fair value of the consideration received or receivable to the extent it
is probable that the economic benefits will flow to the Group and the revenue can be reliably
measured. The following specific recognition criteria must also be met before revenue is recognised.
Interest income
Revenue is recognised as interest accrues using the effective interest rate method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the
relevant period using the effective interest rate, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to the net carrying amount of the
financial asset.
q. Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Group.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a
reduction in the proceeds received.
r. Earnings per Share
Basic earnings per share is calculated as net profit/(loss) attributable to members of the parent,
adjusted to exclude any costs of servicing equity (other than dividends) and preference share
dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus
element.
Diluted earnings per share is calculated as net profit/(loss) attributable to members of the parent
adjusted for:
•
•
•
Cost of servicing equity (other than dividends) and preference shares dividends;
The after tax effect of dividends and interest associated with dilutive potential ordinary shares
that have been recognised as expenses; and
Other non-discriminatory changes in revenues or expenses during the period that would result
from the dilution of potential ordinary shares.
Divided by the weighted average number of ordinary shares and dilutive potential ordinary shares,
adjusted for any bonus element.
37
Summary of Significant Accounting Policies (continued)
For personal use only
s. Income Tax
Deferred income tax is provided on all temporary differences at the Consolidated Statement of
Financial Position date between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
•
•
Except where the deferred income tax liability arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; or
In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, except where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry-forward of unused tax
assets and unused tax losses can be utilised:
•
•
Except where the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or
In respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are only recognised to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be utilised.
Unrecognised deferred income tax assets are reassessed at each Consolidated Statement of Financial
Position date and are recognised to the extent that it has become probable that future taxable profit
will allow the deferred tax asset to be recovered.
The carrying amount of deferred income tax assets is reviewed at each Consolidated Statement of
Financial Position date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax asset and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the Consolidated Statement of Financial Position
date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the
Consolidated Statement of Comprehensive Income.
t. Other Taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
38
Summary of Significant Accounting Policies (continued)
For personal use only
•
•
Where the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition of the
asset or as part of the expense item as applicable; and
Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables on the Consolidated Statement of Financial Position.
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis and the GST
component of cash flows arising from investing and financing activities, which is recoverable from, or
payable to, the taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of amounts of GST recoverable from, or payable
to, the taxation authority.
u. Employee Benefits
i.
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and
accumulating sick leave expected to be settled within 12 months of the reporting date are
recognised in respect of employees’ services up to the reporting date. They are measured at
the amounts expected to be paid when the liabilities are settled. Liabilities for nonaccumulating sick leave are recognised when the leave is taken and are measured at the rates
paid or payable.
ii.
Superannuation
Contributions made by the Group to employee superannuation funds, which are defined
contribution plans, are charged as an expense when incurred.
v. Principles of Consolidation
A controlled entity is any entity over which Vector Resources Limited has the power to govern the
financial and operating policies so as to obtain benefits from its activities. In assessing the power to
govern, the existence and effect of holdings of actual and potential voting rights are considered.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into
the consolidated financial statements as well as their results for the year then ended. Where
controlled entities have entered (left) the Group during the year, their operating results have been
included (excluded) from the date control was obtained (ceased).
All inter-group balances and transactions between entities in the Group, including any unrealised
profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with those adopted by the parent entity.
Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable
to equity interests held by persons outside the Group, are shown separately within the Equity
section of the Consolidated Statement of Financial Position and in the Consolidated Statement of
Comprehensive Income.
39
Summary of Significant Accounting Policies (continued)
For personal use only
w. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
x. Going Concern
The financial report has been prepared on the basis of accounting principles applicable to a going
concern, which assumes the commercial realisation of the future potential of Vector’s assets and the
discharge of its liabilities in the normal course of business.
As at 30 June 2014, the Group had cash and cash equivalents of $1,170,714, a loss for the year of
$13,507,383 (which includes impairments of exploration and evaluation of $3,114,927 and
amortisation of $8,648,970) and a net cash outflow from operating activities of $187,254. The Group
has a working capital deficiency at 30 June 2014 of $2,242,698.
The Board considers that Vector is a going concern and recognises that additional funding is required
to ensure that it can continue to fund its operations and further develop its mineral exploration and
evaluation assets during the twelve month period from the date of this report. Such additional
funding as occurred during the year ended 30 June 2014 as disclosed in Note 15, can be derived from
either one or a combination of the following:
•
Raising additional capital to fund the Group’s ongoing exploration and development program
and working capital requirements, as and when required;
•
Debt finance including convertible notes issues;
•
The farm-down or sale of its mineral interest; or
•
The successful commercial exploitation of the Group’s mineral interests.
Subsequent to year end, the company has implemented a number of funding measures as further
outlined in Note 24 and includes:
•
New funding by way of an unsecured convertible notes of $1,850,000. Funds from the notes
were partially used to repay secured loan notes of $1,550,000 (Note 15);
•
Secured loan note holders agreed to waive all rights to be repaid any amounts of either interest
or bonus fees of $165,000;
•
An underwritten pro rata non-renounceable rights issue to raise $202,035;
•
Agreement with a number of non-related creditors to accept discounted terms totaling
$924,258 on amounts owing for work undertaken on the bulk sample program at the
Gwendolyn Gold Project;
•
Relinquishment of the Company’s interest in the Muriels Extension project which will result in a
refund from a government authority of approximately $150,000.
40
For personal use only
Summary of Significant Accounting Policies (continued)
2.
The Company has also taken steps to reduce operating and overhead costs, including the downsizing
of office space and staff redundancies. In addition, directors and their related entities have provided
their support to the company by undertaking to not call upon the company for payment of
outstanding debts of $409,573 until the company is in a position to repay.
Accordingly, the Directors believe that subject to prevailing equity market conditions, Vector will
obtain sufficient funding to enable it to continue as a going concern and that it is appropriate to
adopt that basis of accounting in the preparation of the financial report.
Should Vector be unable to obtain sufficient funding as outlined above, there is a material
uncertainty that may cast significant doubt whether it will be able to continue as a going concern
and therefore, whether it will realise its assets and extinguish its liabilities in the normal course of
business and at the amounts stated in the financial report. The financial statements do not include
any adjustments relating to the recoverability and classification of recorded asset amounts or to the
amounts and classification of liabilities that might be necessary should it not continue as a going
concern.
y. Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all expenses
directly attributable to the manufacturing process as well as suitable portions of related production
overheads, based on normal operating capacity. Costs of ordinarily interchangeable items are
assigned using the first in, first out cost formula. Net realisable value is the estimated selling price in
the ordinary course of business less any applicable selling expenses.
Critical Accounting Estimates and Judgements
The Directors re-evaluate estimates and judgements incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained both
externally and within the Group.
41
Critical Accounting Estimates & Judgements (continued)
For personal use only
Key Judgements – Exploration and Evaluation Expenditure
3.
The Group’s policy for exploration and evaluation is discussed in Note 1(g). The application of this
policy requires management to make certain assumptions as to future events and circumstances. Any
such estimates and assumptions may change as new information becomes available. If, after having
capitalised exploration and evaluation expenditure, management concludes that the capitalised
expenditure is unlikely to be recovered by future sale or exploitation, then the relevant capitalised
amount will be written off through the profit or loss. At the date of this report, the Group has sufficient
reason to believe rights to explore in specific areas will be granted, expenditure on further exploration
for the evaluation of mineral resources in specific areas has been budgeted, exploration in specific areas
is on-going and has led to the discovery of viable quantities of mineral resources and the Group has not
decided to discontinue such activity and sufficient data exists to indicate that, although a development
in a specific area is on-going and has led to the discovery of viable quantities of mineral resources and
development in a specific area is likely to proceed, that carrying amount of the exploration and
evaluation assets are likely to be recovered in full from successful development or sale. Such capitalised
expenditure is carried at reporting date of $6,383,533 (2013: $16,754,514) and the amount written off
through the profit or loss for projects abandoned amounted to $3,114,927 (2013: $1,212,449).
Financial Risk Management
a. Financial Risk Management Policies
The Group’s financial instruments consist mainly of deposits with banks, local money market
instruments, accounts receivable and payable.
The main purpose of non-derivative financial instruments is to raise finance for Group operations.
The Group does not trade in derivatives.
i.
Treasury Risk Management
The Board meet on a regular basis to analyse financial risk exposure and to evaluate treasury
management strategies in the context of the most recent economic conditions and forecasts.
The Board’s overall risk management strategy seeks to assist the Group in meeting its financial
targets, whilst minimising potential adverse effects on financial performance.
ii.
Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are interest rate risk,
liquidity risk and credit risk.
42
Financial Risk Management(continued)
For personal use only
b. Interest Rate Risk
At 30 June 2014, the effect on profit/(loss) and equity as a result of changes in the interest rate, with
all other variables remaining constant would be as follows:
Consolidated
Year Ended
Year Ended
30 June 2014
30 June 2013
$
$
Change in Profit/(Loss)
Increase in interest rate by 1%
(135,044)
(20,724)
Decrease in interest rate by 1%
135,044
20,724
Change in Equity
Increase in interest rate by 1%
Decrease in interest rate by 1%
(135,044)
135,044
(20,724)
20,724
The Group’s exposure to risk of changes in market interest rates relates primarily to the company’s
cash balances. The Board constantly analyses its interest rate exposure. Within this analysis,
consideration is given to potential renewals of existing positions, alternative financing positions and
the mix of fixed and variable interest rates.
Floating Interest
Rate
2014
2013
$
$
Consolidated
Financial Assets
Cash and cash
equivalents
Receivables
Other current assets
Available for sale
financial assets
Weighted average
interest rate
Fixed Interest
Rate <1 Year
2014
2013
$
$
Non-interest
Bearing
2014
2013
$
$
Total
2014
$
2013
$
1,155,140
-
841,247
-
526,570
-
268,093
-
15,574
-
175,549
-
1,170,714
526,570
-
1,016,796
268,093
-
-
-
4,479
2,850
-
-
4,479
2,850
1,155,140
841,247
531,049
270,943
15,574
175,549
1,701,763
1,287,739
2.80%
2.80%
1.91%
1.91%
5,528,379
419,944
5,528,379
419,944
5,528,379
419,944
5,528,379
419,944
Financial Liabilities
At amortised cost
Payables
-
-
-
-
All trades and other payables within the Group are due in less than one (1) year.
43
Financial Risk Management (continued)
For personal use only
c. Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at
balance date for financial assets, is the carrying amount, net of any provisions for impairment of
those assets, as disclosed in the Consolidated Statement of Financial Position and Notes to the
Financial Statements.
Receivable balances are monitored on an on-going basis with the result that the Group does not
have a significant exposure to bad debts.
The credit risk for counterparties included in trade and other receivables at 30 June 2014 is detailed
below:
Consolidated
Year Ended
Year Ended
30 June 2014
30 June 2013
$
$
Trade and Other Receivables
Trade Debtors
132,753
124,113
Other Receivables
393,817
143,980
526,570
268,093
Trade and other receivables within the Group are expected to be received as follows:
Less than 6 months
6 months to 1 year
1 to 5 years
Over 5 years
526,570
526,570
268,093
268,093
All receivables are not past due and have not been impaired.
d. Liquidity Risk
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate
unutilised borrowing facilities are maintained.
e. Fair Values
The net fair value of the Group’s at-call and short-term deposits with banks, accounts receivables
and payables are in line with the carrying values.
No financial assets and financial liabilities are readily traded on organised markets in standard form
other than available for sale financial assets.
44
For personal use only
Financial Risk Management (continued)
4.
The aggregate fair value and carrying amounts of financial assets and financial liabilities at balance
date are as follows:
Consolidated
Year Ended
Year Ended
30 June 2014
30 June 2013
$
$
Financial Assets
Cash and cash equivalents
1,170,714
1,016,796
Trade and other receivables
526,570
268,093
Available for sale financial assets
4,479
2,850
1,701,763
1,287,739
The fair values are comparable to their carrying amount.
Financial Liabilities
Trade and other payables
5,528,379
5,528,379
419,944
419,944
Revenue
Consolidated
Year Ended
30 June 2014
$
a. Operating sales revenue
Gold sales
b. Cost of Sales
Production costs
Amortisation of costs transferred from
exploration and evaluation expenditure
Inventory movement
c. Non-Operating Activities
Interest received
Other income
Year Ended
30 June 2013
$
1,134,812
1,134,812
-
(5,395,395)
-
(8,648,970)
3,257,977
(10,786,388)
-
13,918
13,750
27,668
59,485
59,485
45
For personal use only
5.
6.
Impairment of exploration and evaluation
Impairment of exploration and evaluation
Iron ore assets
Gold assets
(1,045,786)
(2,069,141)
(3,114,927)
(871,384)
(341,065)
(1,212,449)
Income Tax Expense
(a) The components of income tax expense comprise of:
Current Tax
Deferred Tax
Under/Over provision from previous years
-
-
(b) The prima facie tax benefit on loss from ordinary activities before tax is reconciled to the income
tax as follows:
Prima facie tax (benefit) on operating loss from
ordinary activities before tax at 30%
Entertainment expenses
Depreciation expense
Impairment of financial assets available-for-sale
Write off capitalised exploration expenditure
previously claimed
Accounting loss on option expiry
Tax effect on timing difference
Capital raising and other costs deducted
Capitalised exploration expenditure
Depreciation per tax
Future income tax benefits not brought to account
Income tax for the year
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
(4,052,215)
31
4,173
489
(720,928)
512
11,388
2,730
2,540,827
-
299,455
359
501,044
(64,064)
(418,674)
(4,173)
1,492,562
-
(145,383)
(68,692)
(1,362,234)
(11,388)
1,994,181
-
46
Income Tax Expense (Continued)
For personal use only
(c) Deferred tax assets/liabilities:
Consolidated
Year Ended
30 June 2014
$
$
1,915,060
1,915,060
5,025,754
4,610
5,030,364
122,229
104,497
540,463
797,092
350,779
1,915,060
187,013
104,985
41,787
4,345,800
350,779
5,030,364
-
-
8,396,343
8,396,343
3,355,072
3,355,072
Deferred tax balances
Deferred tax liabilities:
Capitalised exploration expenditure
Accrued income
Deferred tax assets:
Capital Raising
Available for sale financial assets
Provisions and accruals
Carry forward income tax losses
Carry forward capital losses
Deferred tax assets not recognised
Year Ended
30 June 2013
Net deferred tax asset/liability
Unrecognised deferred tax balances
Deferred tax assets
Carry-forward income tax losses
(d) Tax losses
The company has Australian income tax losses of $30,644,783 (2013: $25,669,575) and Australian
capital losses of $1,169,263 (2013: $1,169,263) for which no deferred tax asset is recognised in the
Statement of Financial Position. Losses are recoupable subject to relevant Australian taxation statutory
requirements being met.
The tax benefits of the above deferred tax assets will only be obtained if:
(a)
(b)
(c)
The company derives future assessable income of a nature and of an amount sufficient to enable
the benefits to be utilized;
The Company continues to comply with the conditions for deductibility imposed by law; and
No changes in income tax legislation adversely affect the company in utilising the benefits.
47
7.
Auditor’s Remuneration
For personal use only
Amounts received or due and receivable by the auditors for:
8.
9.
Consolidated
Year Ended
30 June 2014
$
Auditing or reviewing of the financial
statements
31,842
31,842
Year Ended
30 June 2013
$
36,807
36,807
Cash and Cash Equivalent
Cash at bank
Restricted cash (a)
Total
Details of interest rates are disclosed in Note 3.
Consolidated
Year Ended
30 June 2014
$
1,158,714
12,000
1,170,714
Year Ended
30 June 2013
$
568,709
448,087
1,016,796
(a) Included in the Cash at Bank above, below are restricted funds relating to bonds:
Environmental Bonds
Property Bond
Credit Card Bond
Total
12,000
12,000
282,000
154,087
12,000
448,087
Trade and Other Receivables
Current
Sundry debtors
526,570
526,570
268,093
268,093
1,024,035
2,233,942
-
3,257,977
-
10. Inventories
Current
Gold bullion – at net realisable value
Gold in circuit and mine stock – at net realisable
value
48
11. Property, Plant and Equipment
For personal use only
Property Plant & Equipment by category:
Buildings and Improvements
Opening balance
Plus: additions
Less: depreciation
Less: disposal
Plus accumulated depreciation written back on disposal
Computer Software
Opening balance
Plus: additions
Less: depreciation
Less: disposal
Plus: accumulated depreciation written back on disposal
Plant and Equipment
Opening balance
Plus: additions
Less: depreciation
Less: disposal
Plus: accumulated depreciation written back on disposal
Motor Vehicles
Opening balance
Plus: additions
Less: depreciation
Less: disposal
Plus: accumulated depreciation written back on disposal
Furniture & Fixtures
Opening Balance
Plus: additions
Less: depreciation
Less: disposal
Plus: accumulated depreciation written back on disposal
Computer Equipment
Opening balance
Plus: additions
Less: depreciation
Less: disposal
Plus: accumulated depreciation written back on disposal
Total Property, Plant and Equipment
Opening balance
Plus: additions
Less: depreciation
Less: disposal
Plus: Accumulated depreciation written back on disposal
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
62,319
(33,910)
(194,815)
185,560
19,154
93,223
2,901
(33,805)
62,319
6,890
(5,947)
943
13,744
1,392
(8,246)
6,890
15,653
10,681
(18,878)
7,456
33,413
1,090
(18,850)
15,653
118,872
(25,383)
93,489
97,474
46,007
(24,609)
118,872
24,184
(18,882)
5,302
98,679
(74,495)
24,184
9,363
(7,284)
2,079
12,875
5,215
(8,727)
9,363
237,281
10,681
(110,284)
(194,815)
185,560
128,423
349,408
56,605
(168,732)
237,281
49
For personal use only
12. Financial Assets
Available for Sale Financial Assets
Provision for impairment
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
316,951
(312,472)
4,479
316,951
(314,101)
2,850
Impairment of these assets has been based on the market value at the year end.
13. Exploration and Evaluation Expenditure
Non-Current
Deferred exploration expenditure, at cost
Exploration expenditure movement:
Brought forward at beginning of year
Exploration expenditure impaired during the year
Exploration expenditure amortised during the year
Exploration expenditure capitalised during year
Carried forward exploration expenditure
6,383,533
16,752,514
16,752,514
(3,114,927)
(8,648,970)
1,394,916
6,383,533
13,209,918
(1,212,449)
4,755,045
16,752,514
The value of the company’s interest in exploration evaluation expenditure is dependent upon:
• The continuance of the company’s right of tenure of the areas of interest;
• The results of future exploration; or
• The recoupment of costs through successful development and exploitation of the areas of interest
or, alternatively, by their sale.
There may exist, on the company’s exploration properties, areas subject to claim under Native Title or
containing sacred sites or sites of significance to Aboriginal people. As a result, the company’s
exploration properties or areas within the tenements may be subject to exploration and mining
restrictions.
14. Trade and Other Payables
Current
Trade Payables
Other Payables
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
3,734,514
1,793,865
5,528,379
233,668
186,276
419,944
50
For personal use only
15. Borrowings
Current
Loan Notes – Secured (i)
Loan – Unsecured (ii)
(i)
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
1,550,000
100,000
1,650,000
-
Loan Notes – Secured
On 14 January 2014, Vector announced that it had secured a $3m debt facility to fund its bulk
sample campaign. The debt facility is secured by a deed of mortgage over the tenements
comprising the Gwendolyn East Cutback Project and a fixed charge over the proceeds of the sale of
gold account. The principal terms of the facility are:
(ii)
Maturity Date:
30 June 2014 (Extended to 31 August 2014)
Interest:
10% flat rate
Bonus fee:
5% flat fee on the company achieving net cash flow from the Project of $4m;
a further 5% flat fee on the company achieving net cash flow from the Project of $8m.
Subsequent to year end, loan note holders agreed to waive all rights under the Note Deed to be
repaid any amounts of either interest or bonus fees.
(ii) Loan - Unsecured
The unsecured loan was advanced by a director related entity and has no fixed repayment date and
does not incur interest. The entity has agreed not to not call upon the company for payment of
outstanding loan amount until the company is in a financial position to repay.
16. Provisions
Provision for annual leave
Opening balance
Additional provisions
Amount utilised
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
76,470
19,925
(76,815)
19,580
52,184
51,022
(26,736)
76,470
51
For personal use only
Provisions (continued)
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
-
64,797
22,536
(30,803)
(56,530)
-
Provision for days in lieu
Opening balance
Additional provisions
Amount utilised
Reversals
17. Share Capital
Ordinary Shares
Share capital 303,053,625 (2013: 303,053,625) fully paid ordinary shares.
At the beginning of the reporting period
Fully paid ordinary shares issued during the period
Share issue costs
At reporting date
Consolidated
Year Ended
Year Ended
30 June 2014
30 June 2013
$
$
24,947,264
19,757,534
5,593,665
(403,935)
24,947,264
24,947,264
Ordinary shares participate in dividends and the proceeds on winding up of the company in proportion
to the number of shares held. At shareholders’ meetings each ordinary share is entitled to one (1) vote
when a poll is called, otherwise each shareholder has one (1) vote on a show of hands.
Capital Management
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide
the shareholders with adequate returns and ensure that the Group can fund its operations and continue
as a going concern.
The Group’s capital includes ordinary share capital and options.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and
adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of debt levels, distributions to shareholders and share issues.
52
18. Reserves
For personal use only
Options and Share Based Payments Reserve
At the beginning of the reporting period
Options issued*
At reporting date
Year Ended
30 June 2014
$
2,502,913
2,502,913
Consolidated
Year Ended
30 June 2013
$
1,577,903
925,010
2,502,913
Number of options
162,107,260
162,107,260
Number of options
20,000,000
144,107,260
(2,000,000)
162,107,260
*Options issued during July 2012 – June 2013 period.
Opening balance
Issued during the period
Forfeited during the period
Expired during the period
Closing balance
19. Segmental Information
a. Type and Location
The operating segments are identified by the Directors based on the type of exploration being
conducted by the Group. Financial information of these operating businesses is reported to Board
on a half yearly basis.
During the year, the Group operated in two mineral exploration segments, gold and iron ore, located
in Western Australia. All other activities are considered to relate to the Corporate Head Office.
b. Basis of accounting for purposes of reporting by operating segments
Unless stated otherwise, all amounts reported to the Directors are determined in accordance with
accounting policies that are consistent with those adopted in the Annual Financial Statement of the
Group.
53
For personal use only
Segment Information (continued)
Segment Performance
Operating sales revenue
Cost of sales
Other income
Employee benefits expenses
Consulting fees
Administration expenses
Depreciation
Exploration expenditure
Finance Costs
Impairment of exploration
and evaluation
Impairment of financial
assets
Occupancy costs
Directors' fees
Other expenses
Loss on Sale of Investment
Loss for the period
Gold
2014
$
2013
$
Iron Ore
2014
$
2013
$
Unallocated
2014
2013
$
$
Total
2014
$
2013
$
1,134,812
(10,786,388)
-
-
-
-
-
1,134,812
(10,786,388)
-
1,570
(11,089)
(6,736)
(2,069,141)
(271)
(5,515)
(833)
(341,065)
13,898
(269)
-
(230)
-
12,200
(91,967)
(80,575)
(157,598)
(13,909)
(165,000)
59,485
(169,489)
(277,770)
(291,426)
(37,128)
-
27,668
(103,056)
(80,575)
(164,603)
(13,909)
(165,000)
59,485
(169,760)
(277,770)
(297,171)
(37,961)
-
(1,045,786)
(871,384)
-
-
(3,114,927)
(1,212,449)
-
-
-
-
1,630
(9,099)
1,630
(9,099)
67
(11,220)
(2,096,549)
(1,276)
(9,129)
(358,089)
(9,317)
(1,041,474)
(8)
(593)
(872,215)
(20,009)
(100,250)
(102,306)
(717,784)
(24,231)
(160,958)
(260,979)
(1,195)
(1,172,790)
(19,942)
(100,250)
(122,843)
(3,855,807)
(25,515)
(160,958)
(270,701)
(1,195)
(2,403,094)
(11,748,125)
(358,089)
(1,041,474)
(872,215)
(717,784)
(1,172,790)
(13,507,383)
(2,403,094)
54
For personal use only
Segment Information (continued)
Gold
2014
$
Segment Assets
Exploration Expenditure
Opening balance
Exploration expenses
Exploration Written off
Amortisation
Other assets
Total Assets
Segment liabilities
Net Assets
2013
$
15,751,083
11,424,752
1,350,561
4,667,396
(2,069,141)
(341,065)
(8,648,970)
-
6,383,533
15,751,083
3,657,368
10,040,901
Iron Ore
2014
$
1,001,431
2013
$
Unallocated
2014
2013
Total
2014
$
16,752,514
2013
$
1,785,166
-
-
13,209,918
44,355
87,649
-
-
1,394,916
4,755,045
(1,045,786)
(871,384)
-
-
(3,114,927)
(1,212,449)
-
-
-
-
(8,648,970)
-
-
1,001,431
-
-
6,383,533
16,752,514
495,283
3,914
67,896
1,426,881
961,841
5,088,163
1,525,020
16,246,366
3,914
1,069,327
1,426,881
961,841
11,471,696
18,277,534
(4,046,405)
(42,150)
-
(16,484)
(3,151,554)
(437,780)
(7,197,959)
(496,414)
5,994,496
16,204,216
3,914
1,052,843
(1,724,673)
524,061
4,273,737
17,781,120
55
20. Cash Flow Information
For personal use only
a. Reconciliation of cash
Cash at the end of the financial year as shown in the Consolidated Statement of Cash Flows is
reconciled to items in the statement of financial position as follows:
Cash and cash equivalents
Consolidated
Cash at bank and in hand
Reconciliation of loss after income tax to net cash
outflow from operating activities
Loss for the year
Non-cash flows in loss from ordinary activities
Depreciation expenses
Loss on write off of property, plant and equipment
Options issued in lieu of payment
Net interest paid included in investing and
financing
Impairment of financial assets available for sale
Loss on sale of investment
Exploration expenditure written off
Amortisation of exploration and evaluation
expenditure
Movement in inventory
Write off of other non-current assets
Changes in assets and liabilities:
(Increase)/Decrease in receivables
Increase/(Decrease) in payables
Increase/(Decrease) in accruals and provisions
Net cash used in operating activities
Year Ended
30 June 2014
$
1,170,714
Year Ended
30 June 2013
$
1,016,796
(13,507,383)
(2,403,094)
13,909
9,254
-
37,961
-
165,000
(1,630)
3,114,927
9,099
1,195
1,212,449
8,648,970
(3,257,977)
-
-
(390,372)
3,553,275
1,464,773
(187,254)
3,309
19,843
(49,923)
(1,169,161)
21. Controlled Entities
Controlled Entities included in the consolidated financial statements are listed below. The financial year
ends for the controlled entities are the same as the parent entity.
Principal Activity
Golden Iron Resources Ltd
Louise Minerals Pty Ltd
Muriels Extension Pty Ltd
Pure Dawn Pty Ltd
Gold Exploration
Mineral Exploration
Mineral Exploration
Investment
Country of
Incorporation
Australia
Australia
Australia
Australia
Ownership Interest
2014
2013
%
%
100
100
100
100
100
100
100
100
56
For personal use only
22. Commitments and Contingencies
Exploration Expenditure
No later than one (1) year
Longer than one(1) year, but not longer than five (5)
years
Longer than five (5) years
Leasing
No later than one (1) year
Longer than one(1) year, but not longer than five (5)
years
Longer than five (5) years
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
348,140
795,170
1,160,760
2,834,000
4,342,900
1,993,240
3,449,140
6,237,550
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
15,153
318,120
15,153
318,120
Operating Lease
Vector Resources Limited executed a six month agreement for its office on 26 August 2014.
57
23. Related Party Transactions
For personal use only
Loans made by/(to) Director and Director related entities
The Group owed Directors and companies associated with the Directors amounts relating to funds
advanced and services provided.
Balances receivable/(payable) to Directors and Director related companies as at end of year:
Brillo Investments Ltd
Gary Castledine
Mandevilla Pty Ltd
Yangtze Trust
Lost State Pty Ltd
Year Ended
30 June 2014
$
Year Ended
30 June 2013
$
(36,667)
(36,667)
(183,600)
(11,000)
(141,639)
(7,333)
(7,333)
(13,933)
(7,000)
-
All loans made by the Directors to the company and by the company to a Director related company
were made as an unsecured loan and are payable on demand on commercial terms. Parties are related
because of common Directors.
Services provided by Director related entities
For services provided by Director Related Entities, refer to Remuneration Report disclosed in the
Directors’ Report for Consulting Fees paid to the Directors and their related or associated entities for
matters of an administrative nature and conducted on normal commercial terms.
Remuneration of Key Management Personnel
Consolidated
Short-term
Post-employment superannuation
Option based payments
Year Ended
30 June 2014
$
582,818
13,253
596,071
Year Ended
30 June 2013
$
673,591
38,974
712,565
58
For personal use only
24. Events Subsequent to Balance Date
No matters or circumstances have arisen, since the end of the financial year, which significantly
affected, or may significantly affect, the operations of the company, the results of those operations, or
the state of affairs of the company in subsequent financial years, other than:
1) The company arranged for full repayment of its existing secured debt facility amounting to
$1,550,000, replaced by unsecured convertible notes (Notes). The principle terms of the Notes,
conversion of which will be subject to shareholder approval, are as follows:
Redemption Date: 12 months from date of issue
Conversion Price: the lesser of:
(b) The lowest issue price of Shares during the Conversion Period; or
(b) the price that is 80% of the volume weighted average market price of the
company’s ordinary fully paid shares calculated over the last 5 days on
which sales were recorded before the date of conversion and issue.
Conversion Period: A noteholder may convert at any time prior to the Redemption Date.
Interest Rate:
Nil%
The total amount raised from the Notes was $1,850,000.
2) The company announced an underwritten pro rata non-renounceable rights issue of ordinary fully
paid shares.
The terms of the offer will be as follows:
Type of Offer:
Pro-rata non-renounceable
Eligible participants:
Shareholders on the Record Date and whose
registered addresses are in Australia or New
Zealand
Basis of entitlement:
One (1) new Share for every three (3) existing
Shares
Number of existing Shares:
303,053,625
Number
of
subscription):
new
Shares
(full 101,017,875
Record Date to determine entitlements:
To be advised
Issue price:
$0.002 per new share
Funds raised from the issue of $202,035 (before costs) will be used to provide additional working
capital, including for the identification and review of potential investment opportunities.
3) The company reached agreement with a number of non-related creditors to accept discounted
terms on amounts owing for work undertaken on the bulk sample program at the Gwendolyn Gold
Project. The total amount of discount received was $924,258. The reduced payment amount has not
been accounted for at 30 June 2014.
59
For personal use only
Events Subsequent to Balance Date (continued)
4) The company relinquished its interest in the Muriels Extension Project. As a result of the
relinquishment, the company is due a refund from a government authority of approximately
$150,000.
25. Earnings per Share
Year Ended
30 June 2014
$
Consolidated
Year Ended
30 June 2013
$
(13,507,383)
(2,403,094)
303,053,625
(0.045)
199,687,694
(0.012)
Net loss for the year
Weighted average number of ordinary shares
outstanding during the year used in calculations of EPS
EPS – dollars
26. Parent Entity Information
Information relating to Vector Resources Ltd
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Net Assets
Issued Capital
Option Reserve
Accumulated losses
Total Shareholder’s Equity
Loss of the parent Entity
Total Comprehensive Loss of the parent entity
Consolidated
Year Ended
Year Ended
30 June 2014
30 June 2013
$
$
3,973,106
5,380,180
(3,136,231)
(3,136,231)
2,243,949
24,947,264
2,502,913
(25,206,228)
2,243,949
(14,482,532)
(14,482,532)
909,714
17,164,261
(358,285)
(437,780)
16,726,481
24,947,264
2,502,913
(10,723,696)
16,726,481
(1,588,547)
(1,588,547)
60
27. Interest in Joint-Ventures
For personal use only
The parent entity has entered into the following joint-venture operations:
Joint Venture Project
Earaheedy
Percentage Interest
50% (2013: 50%) (Cazaly Resources Ltd 50%)
Principal Exploration
Iron Ore
The joint-venture is not a separate legal entity but is a contractual arrangement between the
participants for sharing costs and output and do not in themselves generate revenue and profit.
Exploration expenditure is the only asset of the joint-ventures. The Group’s interest in exploration
expenditure in the above mentioned joint-venture is as follows:
Earaheedy JV
Year Ended
Year Ended
30 June 2014
30 June 2013
$
$
Non-current Assets
Mineral Assets
1,001,431
Impairment
Carrying Amount
1,001,431
The recoverability of the carrying amount of the mineral assets is dependent on successful development
and commercial exploration alternatively, sale of the respective areas of interest.
All expenditure on this project during the year has been capitalised.
All tenements part of the Earaheedy joint venture have been surrendered during the 2014 year and as
such there is no carrying value on the mineral assets.
Earaheedy Joint Venture – Anglo American Farm-in
On 26 September 2011, Vector and Cazaly Resources Limited collectively the Earaheedy Joint-Venture
(EJV) signed a farm-in agreement with Anglo American, the global diversified mining house (“Anglo
American”).
•
•
•
•
•
The farm-in allows Anglo American to earn a 75% interest in the Earaheedy Project
Staged success payments of up to $51 million to the EJV
Anglo American to undertake due diligence exploration program of a minimum of 7,500 metres
of reverse circulation or diamond drilling to be completed within 18 months.
Anglo American will then have the right to earn:
o An initial 51% interest in the project by paying $1 million to the EJV and expending $20
million within 4 years.
o 75% interest by completing a Bankable Feasibility Study (BFS) and payment of an additional
$5 million to the EJV.
Following the delivery of a positive BFS, a success payment of$45 million would be payable to
the EJV. The EJV is to have the right to contribute to the project or dilute to a royalty of 1.25%
FOB.
On 3 April 2014, it was announced that Anglo American had withdrawn from the EJV due to prolonged
delays in access to ground for exploration. Anglo American is responsible for all rehabilitation required
and the tenements under the EJV were surrendered.
61
For personal use only
28. Contingent Consideration for Muriels Extension Tenements
On 31 May 2011, Vector completed the acquisition of the Muriels Extension tenement portfolio and its
related mining information (“Muriels Extension”).
The company is to undertake an 18 month work program to determine if the project is worth pursuing.
In the event it is – Vector is to issue the vendors 5 million fully paid ordinary shares.
Assuming that the company does elect to issue the 5 million shares to the vendors and continues with
the project, the company will then continue to undertake further exploration work with the objective of
delineating a JORC compliant resource within 48 months of acquisition.
The company will issue the vendor with an additional 3 million fully paid ordinary shares on the
delineation of a JORC compliant resource of 250,000 ounces of gold. If a JORC compliant resource of
500,000 ounces of gold is delineated, then an additional 10 million fully paid ordinary shares will be
issued to the vendor.
The value of the fully paid ordinary shares will be calculated on the prior 30 day volume weighted
average price of shares from the day of issue.
Subsequent to year end, Vector announced that it had decided to relinquish its interest in the Muriels
Extension Project.
29. Share Based Payments
There were no share based payments made during the financial year.
62
For personal use only
Share Based Payments (continued)
The weighted average exercise price, outstanding options and options exercised are as follows:
2014
Opening balance
Issued during the period
Forfeited during the period
Exercised during the period
Closing balance
Number
of options
162,107,260
162,107,260
Weighted Average
Exercise Price
$0.25
$0.25
The weighted average remaining contractual life of options outstanding at the end of the reporting
period was 0.61 years. The exercise price of outstanding options at the end of the reporting period was
$0.25.
2013
Opening balance
Issued during the period
Forfeited during the period
Exercised during the period
Closing balance
Number
of options
20,000,000
144,107,260
(2,000,000)
162,107,260
Weighted Average
Exercise Price
$0.26
$0.25
$0.20
$0.25
The weighted average remaining contractual life of options outstanding at the end of the reporting
period was 1.61 years. The exercise price of outstanding options at the end of the reporting period was
$0.25.
63
ADDITIONAL SHAREHOLDER INFORMATION
For personal use only
Additional information required by the Australian Securities Exchange (ASX) listing rules as at
26 September 2014.
List of 20 largest shareholders
Ranking
Name
Shares Held
% of total
shares
1
2
3
EAGLE BRILIANT HOLDINGS LIMITED
LOBSTER BEACH PTY LTD
SLADE TECHNOLOGIES PTY LTD
MR ROBERT PAUL MARTIN & MRS SUSAN PAMELA
MARTIN <R & S MARTIN SUPER FUND>
ORBIT DRILLING PTY LTD
PERSHING AUSTRALIA NOMINEES PTY LTD
GOLDBONDSUPER PTY LTD
TT NICHOLLS PTY LTD
PERIZIA INVESTMENTS PTY LTD
RPM SUPER PTY LTD
SOLEQUEST PTY LTD
STEVSAND HOLDINGS PTY LTD
MR KENNETH BULL
MR GLYN COLIN POVEY
INTERNATIONAL MINING SERVICES LTD
MRS WENDY JANELLE HARDCASTLE
MR JOHN MCGREGOR THOMS & MRS NOLA THOM
ROBINSON CORP PTY LTD
MR ROBERT PAUL MARTIN & MRS SUSAN PAMELA
MARTIN <RP & 29 MARTIN S/FUND>
AURO PTY LTD
BARQUE INVESTMENTS PTY LTD
BRIAN LLOYD WILLIAMS
51,090,538
13,047,031
12,402,741
16.86%
4.31%
4.09%
7,980,816
2.63%
6,884,344
5,116,666
4,140,000
3,500,000
3,349,532
3,150,000
3,123,384
3,000,000
3,000,000
2,925,000
2,500,000
2,400,000
2,385,000
2,327,964
2.27%
1.69%
1.37%
1.15%
1.11%
1.04%
1.03%
0.99%
0.99%
0.97%
0.82%
0.79%
0.79%
0.77%
2,250,000
0.74%
2,250,000
2,136,180
2,107,972
0.74%
0.70%
0.70%
141,067,168
46.55%
4
5
6
7
8
9
10
11
12
12
13
14
15
16
17
18
18
19
20
Substantial Shareholders
Name
EAGLE BRILIANT HOLDINGS LIMITED
Shares Held
51,090,538
% of total shares
16.86%
64
Distribution of shareholder’s holdings
For personal use only
Ordinary shares held
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Total
Unmarketable Parcels
Number of shareholders
26
48
162
615
310
1,161
551
Number of Shares
2,061
162,694
1,462,526
26,733,988
274,692,356
303,053,625
8,397,361
List of 20 largest option holders
Ranking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
Name
EAGLE BRILIANT HOLDINGS LIMITED
PERSHING AUSTRALIA NOMINEES PTY LTD
MS JOSEPHINE KATHLEEN PATOIR
GOFFACAN PTY LTD
PERIZIA INVESTMENTS PTY LTD
KAPIRI HOLDINGS PTY LTD
SLADE TECHNOLOGIES PTY LTD
MR NICHOLAS DERMOTT MCDONALD
M & K KORKIDAS PTY LTD
SOLEQUEST PTY LTD
KAPIRI HOLDINGS PTY LTD
RPM SUPER PTY LTD
MR ROBERT PAUL MARTIN & MRS SUSAN PAMELA
MARTIN <NITRO SUPER FUND>
MR GERALD WELLS
TT NICHOLLS PTY LTD
CS FOURTH NOMINEES PTY LTD
MRS FIONNUALA CATHERINE EDMONDSON
OVERLAND CORNER WEST PTY LTD
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
MR PAUL ANTHONY GREENWOOD
MR FIONNUALA CATHERINE EDMONDSON
Options Held
51,090,538
6,674,347
5,460,615
5,443,275
3,325,000
3,305,875
3,061,150
2,700,000
2,000,000
1,954,677
1,775,000
1,655,787
% of total
Options
34.04%
4.45%
3.64%
3.63%
2.22%
2.20%
2.04%
1.80%
1.33%
1.30%
1.18%
1.10%
1,500,000
1.00%
1,482,000
1,455,000
1,400,000
1,314,300
0.99%
0.97%
0.93%
0.88%
1,305,750
1,250,000
1,200,000
1,200,000
0.87%
0.83%
0.80%
0.80%
100,553,314
67%
65
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Distribution of option holder’s holdings
Options held
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,000 and over
Total
Unmarketable Parcels
Number of Option holders
3
25
10
92
136
266
171
Number of Options
1,750
86,600
74,155
4,216,963
145,727,792
150,107,260
11,245,628
ENQUIRIES
Shareholders with any enquiries about any aspect of their shareholdings should contact the Company’s
share register as follows:
Link Market Services
Level 4, Central Park
152 St Georges Terrace
Perth WA 6000
Tel:
+61 8 9211 6670
Fax:
+61 8 9211 6660
Web:
www.linkmarketservices.com.au
ELECTRONIC ANNOUNCEMENTS AND REPORTS
Shareholders who wish to receive announcement made to the ASX, as well as receive electronic copies of
the Financial Report and Half-Yearly Report, are invited to provide their email address to the company. This
can be done in writing to the Company Secretary.
REMOVAL FROM THE PRINTED FINANCIAL REPORT MAILING LIST
Shareholders who do not wish to receive the Financial Report should advise the Share Registry in writing to
remove their names from the mailing list. Those shareholders will continue to receive all shareholder
information.
CHANGE OF NAME/ADDRESS
Shareholders who are Issue Sponsored should advise the Share Registry promptly of any changes of name
and/or address so that correspondence with them does not go astray. All such changes must be advised in
writing and cannot be accepted via telephone. Forms can be found on the Share Registry website or
obtained by contacting the Share Registry.
Shareholders who are CHESS and Broker Sponsored should instruct their sponsoring brokers in writing to
notify the Share Registry of any changes of name and/or address.
In case of a name change, the written advice must be supported by documentary evidence.
CONSOLIDATION OF SHAREHOLDINGS
Shareholders who wish to consolidate their separate shareholdings into one (1) account should write to the
Share Registry or their sponsoring broker, whichever is applicable.
STOCK EXCHANGE LISTING
The Company’s shares are listed on the Australian Securities Exchange (ASX). Details of share transactions
and prices published in the financial papers of the daily capital city newspaper under the code VEC.
66
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REGISTERED OFFICE
The Registered Office of the Company is:
Tel:
Fax:
Web:
Vector Resources Limited
Suite 4, Henry James Building
8 Alvan Street
Subiaco WA 6008
+61 8 6188 7800
+61 8 9381 9888
www.vectorresources.com.au
Company Secretary:
Mr Neville Bassett
67
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TENEMENT LISTING
Project
Tenement
MURIELS EXTENSION
GOLDEN IRON
Mt Dimer
Project
Gwendolyn
Project
Gt Bingin
Project
Status
Area
Grant /
Application
Date
Expiry Date
Holder / Applicant
M37/661
Granted
332.00Ha
20/03/2008
29/03/2029
Muriels Extension
P37/7580
Granted
197.73 Ha
20/10/2008
19/10/2016
Muriels Extension
P37/7581
Granted
199.24 Ha
20/10/2008
19/10/2016
Muriels Extension
P37/7582
Granted
199.22 Ha
20/10/2008
19/10/2016
Muriels Extension
P37/7583
Granted
198.90 Ha
20/10/2008
19/10/2016
Muriels Extension
P37/7584
Granted
197.66 Ha
20/10/2008
19/10/2016
Muriels Extension
P37/7585
Granted
113.99 Ha
20/10/2008
19/10/2016
Muriels Extension
P37/7586
Granted
198.32 Ha
20/10/2008
19/10/2016
Muriels Extension
P37/7587
Granted
193.39 Ha
20/10/2008
19/10/2016
Muriels Extension
L77/83
Granted
2.46Ha
29/03/1990
28/03/2015
L77/135
Granted
62.00 Ha
08/09/1993
07/09/2018
L77/147
Granted
16/11/1994
15/11/2014
M77/427
Granted
30/03/1990
29/03/2032
M77/428
Granted
7.88 Ha
664.60
Ha
624.65
Golden Iron Resources
Ltd
Golden Iron Resources
Ltd
Golden Iron Resources
30/03/1990
29/03/2032
M77/957
Granted
Ha
54.00 Ha
20/02/2007
19/02/2028
M77/958
Granted
19/02/2028
Granted
19/03/2007
18/03/2028
E77/1992
Granted
52.00 Ha
634.00
Ha
3Blks
20/02/2007
M77/965
17/05/2012
16/05/2017
Ltd
Golden
Iron Resources
Ltd
Golden Iron Resources
E77/2050
Granted
1Blk
22/10/2012
21/10/2017
Golden Iron Resources
P77/4081
Granted
39-00 Ha
06/07/2012
05/07/2016
Golden Iron Resources
P77/4086
Granted
31.00 Ha
03/08/2012
02/08/2016
Golden Iron Resources
E77/1580
Granted
12/05/2009
11/05/2014
M77/1263
Granted
15/05/2012
14/05/2033
Golden Iron Resources
Ltd
Golden Iron Resources
G77/119
Granted
1Blks
194.30H
299.00Ha
L77/245
Granted
21/02/2013
27/12/2012
20/02/2034
7.00Haa
26/12/2033
Golden Iron Resources
Golden Iron Resources
L77/247
Granted
7.00Ha
27/12/2012
26/12/2033
Golden Iron Resources
L77/248
Granted
96.00Ha
21/02/2013
20/02/2034
Golden Iron Resources
M77/1255
Granted
169.00H
a
29/07/2011
28/07/2032
Golden Iron Resources
Ltd
Ltd
Golden
Iron Resources
Ltd
Golden
Iron Resources
Ltd
Golden Iron Resources
Ltd
Golden Iron Resources
68
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TENEMENT LISTING (continued)
Project
Tenement
Status
Area
Grant /
Application
Date
Expiry Date
Holder / Applicant
Athenia
Mt Palmer
Project
M77/1260
Granted
135.00Ha
15/05/2012
14/05/2033
Golden Iron Resources
Ltd
E77/1318
Granted
50Blks
25/11/2008
26/11/2015
P77/3678
Granted
196.00Ha
29/04/2008
28/04/2016
Golden Iron Resources
Ltd
Golden Iron Resources
Ltd
69
CORPORATE GOVERNANCE STATEMENT
For personal use only
The Board of Vector Resources Limited is responsible for the corporate governance of the company. The
Board guides and monitors the business and affairs of Vector Resources Limited on behalf of the
shareholders by whom they are elected and to whom they are accountable. This Statement reports on
Vector Resources Limited’s key governance principles and practices.
1.
Compliance with Best Practices Recommendations
The company, as a listed entity, must comply with the Corporations Act 2001 and the Australian
Securities Exchanges (ASX) Listing Rules.
The Statement is provided in compliance with
Recommendations in the ASX Corporate Governance Council (ASXCG), Second Edition. The company
recognises the publication of the Third Edition and intends to comply with the prescribed changes when
these take effect for the company’s full financial year commencing from 1 July 2014. Where a
recommendation has not been followed, that fact is disclosed, together with the reasons for the
departure.
For further information on corporate governance policies adopted by the company, refer to the
corporate governance section of our website: www.vectorresources.com.au
The table below summarises the Company’s compliance with the ASXCGC Recommendations:
Principle #
Principle 1
1.1
1.2
1.3
Principle 2
2.1
2.2
2.3
2.4
2.5
2.6
Principle 3
3.1
ASXCGC Recommendations
Lay solid foundations for management and oversight
Establish the functions reserved to the board and those
delegated to senior executives and disclose those
functions.
Disclose the process for evaluating the performance of
senior executives.
Provide the information indicated in the Guide to
Reporting on Principle 1.
Structure the Board to add value
A majority of the board should be independent
directors.
The Chair should be an independent director.
The roles of the Chair and Chief Executive Officer should
not be exercised by the same individual.
The board should establish a nomination committee.
Disclose the process for evaluating the performance of
the board, its committees and individual directors.
Provide the information indicated in the Guide to
Reporting on Principle 2.
Promote ethical and responsible decision-making
Establish a code of conduct and disclose the code or a
summary as to:
•
The practices necessary to maintain confidence in
the company’s integrity;
•
The practices necessary to take into account the
company’s legal obligations and the reasonable
expectations of its stakeholders; and
Reference
Comply
2(a)
Yes
2(g), 3(b),
Remuneration Report
2(a), 2(g), 3(b),
Remuneration Report
Yes
2(d)
Yes
2(b), 2(d)
2(b), 2(d)
Yes
Yes
2(c)
2(g)
No
Yes
2(b), 2(c), 2(d), 2(e)
Yes
4(a)
Yes
4(a)
Yes
Yes
70
CORPORATE GOVERNANCE STATEMENT (continued)
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Principle #
3.2
3.3
3.4
3.5
Principle 4
4.1
4.2
4.3
4.4
Principle 5
5.1
5.2
Principle 6
6.1
6.2
Principle 7
7.1
ASXCGC Recommendations
•
The responsibility and accountability of individuals
for reporting and investigating reports of
unethical practices.
Establish a policy concerning diversity and disclose the
policy or a summary.
Disclose in each Annual Report the measurable
objectives for achieving gender diversity set by the
Board in accordance with the diversity policy and
progress towards achieving them.
Disclose in each Annual Report the proportion of
women employees in the whole organisation, women in
senior executive positions and women on the Board.
Provide the information indicated in the Guide to
Reporting on Principle 3.
Safeguard integrity in Financial Reporting
The board should establish an audit committee.
The audit committee should be structured so that it:
•
Consists only of non-executive directors;
•
Consists of a majority of independent directors;
•
Is chaired by an independent chair, who is not
chair of the board; and
•
Has at least three (3) members.
The audit committee should have a formal charter
Provide the information indicated in the Guide to
Reporting on Principle 4.
Make timely and balanced disclosure
Establish written policies designed to ensure
compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at senior
executive level for that compliance and disclose those
policies or a summary of those policies.
Provide the information indicated in the Guide to
Reporting on Principle 5.
Respect the rights of shareholders
Design a communications policy for promoting effective
communication with shareholders and encouraging
their participation at general meetings and disclose the
policy or a summary of that policy.
Provide the information indicated in the Guide to
Reporting on Principle 6.
Recognise and manage risk
Establish policies for the oversight and management of
material business risks and disclose those policies or a
summary of those policies.
Reference
4(a)
Comply
Yes
4(c)
Yes
4(c)
No
4(c)
Yes
4(a), 4(c)
Yes
3(a)
Yes
3(a)
3(a)
3(a)
Yes
Yes
Yes
3(a)
3(a)
3(a)
No
Yes
Yes
5(a), 5(b)
Yes
5(a), 5(b)
Yes
5(a), 5(b)
Yes
5(a), 5(b)
Yes
6(a)
Yes
71
CORPORATE GOVERNANCE STATEMENT (continued)
For personal use only
7.2
7.3
7.4
Principle 8
8.1
8.2
2.
8.3
8.4
The board should require management to design and
implement the risk management and internal control
system to manage the company’s material business
risks and report to it on whether those risks are being
managed effectively. The board should disclose that
management has reported to it as to the effectiveness
of the company’s management of its material business
risks.
The board should disclose whether it had received
assurance from the chief executive officer and the chief
financial officer that the declaration provided in
accordance with section 295A of the Corporations Act is
founded on a sound system of risk management and
internal control and that the system is operating
effectively in all material respects in relation to financial
reporting risks.
Provide the information indicated in the Guide to
Reporting on Principle 7.
Remunerate fairly and responsibly
The board should establish a remuneration committee.
The Remuneration Committee should be structured so
that it:
• consists of a majority of independent directors
• is chaired by an independent chair
• has at least three members
Companies should clearly distinguish the structure of
non-executive directors’ remuneration from that of
executive directors and senior executive.
Provide the information indicated in the Guide to
Reporting on Principle 8.
6(a), 6(b), 6(d)
Yes
6(c)
Yes
6(a), 6(b), 6(c), 6(d)
Yes
3(b)
3(b)
Yes
Yes
3(b)
Remuneration Report
Yes
3(b)
Yes
The Board of Directors
a.
Roles and Responsibilities of the Board
The Board is accountable to the shareholders and investors for the overall performance of the
company and takes responsibility for monitoring the company’s business and affairs and setting its
strategic direction, establishing and overseeing the company’s financial position.
The following are regarded as the key responsibilities and functions of the Board:
•
•
•
to develop, review and monitor the company’s long-term business strategies and provide
strategic direction to management;
to ensure policies and procedures are in place to safeguard the company’s assets and business
and to enable the company to act ethically and prudently;
to develop and promote a system of corporate governance which ensures the company is
properly managed and controlled;
72
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CORPORATE GOVERNANCE STATEMENT (continued)
The Board of Directors (continued)
•
•
•
•
•
•
•
•
to identify the company’s principal risks and ensure that it has in place appropriate systems of
risk management, internal control, reporting and compliance and that management is taking
appropriate action to minimise those risks;
to review and approve the company’s financial statements;
to monitor management’s performance and the company’s financial results on a regular basis;
to appoint, ratify, appraise and determine the remuneration and benefits of the Managing
Director;
to delegate powers to the Managing Director as necessary to enable the day-to-day business of
the company to be carried on, and to regularly review those delegations;
to ensure that the company has in place appropriate systems to comply with relevant legal and
regulatory requirements that impact on its operations;
to determine the appropriate capital management for the company including share and loan
capital and dividend payments; and
to determine and regularly review an appropriate remuneration policy for employees of the
company.
Other than as specifically reserved by the Board, responsibility for the day-to-day management of
the company’s business activities is delegated to the Chief Executive Officer and Executive
Management.
Currently the role of Chief Executive Officer is facilitated by Managing Director Mr Glyn Povey and
will continue until such time as the scale of operations expands sufficiently to warrant a Chief
Executive Officer.
b. Board Composition
The Directors determine the composition of the Board employing the following principles:
•
•
•
•
•
The Board, in accordance with the company’s constitution must comprise a minimum three (3)
Directors;
The roles of the Chairman of the Board and of the Chief Executive Officer should be exercised
by different individuals;
The majority of the Board should comprise directors who are non-executive;
The Board should represent a broad range of qualifications, experience and expertise
considered to be of benefit to the company; and
The Board must be structured in such a way that it has a proper understanding of, and
competency in, the current and emerging issues facing the company, and can effectively
review management’s decisions.
The Board is currently comprised of two (2) non-executive directors, one (1) executive director and
one (1) non-executive Chairman. Details of the members of the Board, their experience, expertise,
qualifications, terms of office and independent status are set out in the Directors’ Report of the
Financial Report under the heading Directors’ Qualification and Experience.
The roles of Chairman and Chief Executive Officer are carried out by separate persons.
73
CORPORATE GOVERNANCE STATEMENT (continued)
For personal use only
The Board of Directors (continued)
The company’s constitution requires one-third of the directors (or the next lowest whole number) to
retire by rotation at each Annual General Meeting (AGM). The directors to retire at each AGM are
those who have been longest in office since their last election. Where directors have served for
equal periods, they may agree amongst themselves or determine by lot who will retire. A director
must retire in any event at the third AGM since he or she was last elected or re-elected. Retiring
directors may offer themselves for re-election.
A director appointed as an additional or casual director by the Board will hold office until the next
AGM when they may be re-elected.
Chairman and Chief Executive Officer
The Chairman is responsible for:
•
•
•
•
•
•
Leadership of the Board;
The efficient organisation and conduct of the Board’s functions;
The promotion of constructive and respectful relations between Board members and between
the Board and management;
Contributing to the briefing of directors in relation to issues arising at Board meetings;
Facilitating the effective contribution of all Board members; and
Committing the time necessary to effectively discharge the role of the Chairman.
The Board complies with ASX Recommendation 2.2 in that the Chairman, is a non-executive
independent director.
The Chief Executive Officer is responsible for:
•
•
Implementing the company’s strategies and policies; and
The day-to-day management of the company’s business activities.
The board specifies that the role of the Chairman and the Chief Executive Officer are separate roles
to be undertaken by separate people.
c. Nomination Committee
The company does not comply with ASX Recommendation 2.4. The company is not of a relevant size
to consider formation of a Nomination Committee to deal with the selection and appointment of
new Directors and as such a Nomination Committee has not been formed. The role of a Nomination
Committee is however carried out by the Board.
74
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CORPORATE GOVERNANCE STATEMENT (continued)
The Board of Directors (continued)
Nominations of new directors are considered by the full Board in accordance with the company’s
Selection of New Directors Policy.
No other evaluations of the Board, its committees and directors took place in the reporting period.
d. Independent Directors
The company recognises that independent directors are important in assuring shareholders that the
Board is properly fulfilling its role and is diligent in holding senior management accountable for its
performance. The Board assesses each of the directors against specific criteria to decide whether
they are in a position to exercise independent judgement.
Directors of Vector Resources Limited are considered to be independent when they are independent
of management and free from any business or other relationship that could materially interfere with,
or could reasonably be perceived to materially interfere with, the exercise of their unfettered and
independent judgement.
In making this assessment, the Board considers all relevant facts and circumstances. Relationships
that the Board will take into consideration when assessing independence are whether a director:
•
•
•
•
•
Is a substantial shareholder of the company or an officer of, or otherwise associated directly
with, a substantial shareholder of the company;
Is employed, or has previously been employed in an executive capacity by the Company or
another company member, and there has not been a period of at least three (3) years
between ceasing such employment and serving on the Board;
Has within the last 3 years been a principal of a material professional advisor or a material
consultant to the company or another company member, or an employee materially
associated with the service provided;
Is a material supplier or customer of the company or other company member, or an officer of
or otherwise associated directly or indirectly with a material supplier or customer; or
Has a material contractual relationship with the company or another company member other
than as a director.
The company complies with ASX Recommendation 2.1, in that there is a majority of independent
directors on the Board. The independent directors are Mr Gary Castledine, Mr Brian Williams and
Mr Neville Bassett, who the Board has determined independence taking into consideration the
above criteria.
The company maintains a mix of directors from different backgrounds with complementary skills and
experience.
In recognition of the importance of independent views and the Board’s role in supervising the
activities of management the Chairman must be a non-executive director.
75
CORPORATE GOVERNANCE STATEMENT (continued)
The Board of Directors (continued)
For personal use only
e. Avoidance of Conflicts of Interest by Directors
3.
In order to ensure that any interests of a director in a particular matter to be considered by the
Board are known, each director is required by the company to disclose any relationships, duties or
interests held that may give rise to a potential conflict. Directors are required to adhere strictly to
constraints on their participation and voting in relation to any matters in which they may have an
interest.
f. Board Access to Information and Independent Advice
Directors are able to access members of the management team at any time to request relevant
information.
There are procedures in place, agreed by the Board, to enable directors, in furtherance of their
duties, to seek independent professional advice at the company’s expense.
g. Review of Board Performance
The performance of the Board is reviewed by the Chairman. The Chairman conducts performance
evaluations which involve an assessment of each Board member’s performance against specific and
measurable qualitative and quantitative performance criteria. The performance criteria against
which Directors and executives are assessed is aligned with the financial and non-financial objectives
of Vector Resources Limited. Directors whose performance is consistently unsatisfactory may be
asked to retire. A review, in accordance with this criteria, of the Board, was carried out by the
Chairman during the reporting period.
A copy of the Company’s Board Charter is available on the company’s website.
Board Committees
a. Audit Committee
The Board has established an Audit Committee in compliance with ASX Recommendation 4.1. The
audit committee is comprised of the following members:
•
Mr Neville Bassett
•
Mr Gary Castledine
The company does not fully comply with ASX Recommendation 4.2 in that the Audit Committee only
comprises two (2) members. The Board considers that the nature, scale and complexity of the
company’s existing operations do not warrant a full complement of Board members on the Audit
Committee.
The company’s policy is to appoint external auditors who clearly demonstrate quality and
independence. The performance of the external auditor is reviewed annually and applications for
tender of external audit services are requested as deemed appropriate, taking into consideration
assessment of performance, existing value and tender costs. It is auditor’s policy to rotate engaging
partners/Directors on listed companies at least every five (5) years.
76
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CORPORATE GOVERNANCE STATEMENT (continued)
Board Committees (continued)
An analysis of fees paid to the external auditors, including a break-down of fees for non-audit
services, is provided in the notes to the financial statements in the Financial Report.
There is no indemnity provided by the company to the auditor in respect of any potential liability to
third parties.
The external auditor is requested to attend the Annual General Meeting and be available to answer
shareholder questions about the conduct of the audit and preparation and content of the audit
report.
The Directors are satisfied that the provision of non-audit services by the auditors, when utilised, is
compatible with the general standard of independence for auditors imposed by the Corporations
Act.
The company has adopted an Audit Committee Charter and is available on the company’s website.
b. Remuneration Committee
The role of the Remuneration Committee is to assist the Board in fulfilling its responsibilities in
respect of establishing appropriate remuneration levels and incentive policies for employees.
The Remuneration Committee is comprised of the following members:
•
•
Mr Gary Castledine (Chairman)
Mr Brian Williams
The responsibilities include setting policies for senior officers remuneration, setting the terms and
conditions for management, reviewing and making recommendations to the Board on the
company’s incentive schemes and superannuation arrangements, reviewing the remuneration of
both executive and non-executive directors and undertaking review of management’s performance.
Non-executive Directors are paid their fees out of the maximum aggregate amount approved by
shareholders for non-executive remuneration.
The company has structured the remuneration of its senior executives, where applicable, such that it
comprises a fixed salary, statutory superannuation and, where applicable, participation in the
company’s employee share option plan. The company believes that by remunerating senior
executives in this manner it rewards them for performance and aligns their interests with those of
shareholders and increases the company’s performance.
77
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CORPORATE GOVERNANCE STATEMENT (continued)
Board Committees (continued)
4.
Non-executive directors are paid their fees out of the maximum aggregate amount approved by
shareholders for non-executive director remuneration. The company has and may, in the future,
grant options to non-executive directors. The Board is of the view that options (for both executive
and non-executive directors) are a cost effective benefit for small companies such as Vector
Resources Limited that seek to conserve cash reserves. They also provide an incentive that
ultimately benefits both shareholders and the optionholders, as optionholders will only benefit if the
market value of the underlying shares exceeds the option strike price. Ultimately, shareholders will
make that determination.
The Board policy is to remunerate directors at market rates for time, commitment and
responsibilities. The Board determines payments to the Directors and reviews their remuneration
annually, based on market practice, duties and accountability. Independent external advice is
sought when required. Fees for non-executive directors are not linked to the performance of the
company. However, to align directors’ interests with shareholders’ interests, the directors are
encouraged to hold shares in the company.
The company’s aim is to remunerate at a level that will attract and retain high-calibre directors and
employees. Company officers and Directors are remunerated to a level consistent with the size of
the company.
The Board believes that it has implemented suitable practices and procedures that are appropriate
for an organisation of this size and maturity.
In accordance with best practice corporate governance, the structure of non-executive director and
executive compensation is separate and distinct.
The remuneration received by directors and executives in the current period is contained in the
Remuneration Report within the Directors’ Report of the Financial Report.
Other than the statutory superannuation requirements there are no other retirement benefits for
non-executive directors.
Ethical and Responsible Decision Making
a. Code of Ethics and Conduct
The Board endeavours to ensure that the Directors, officers and employees of the company act with
integrity and observe the highest standards of behaviour and business ethics in relation to their
corporate activities. The Code of Conduct sets out the principles, practices and standards of personal
behaviour the company expects people to adopt in their daily business activities.
All Directors, officers and employees are required to comply with the Code of Conduct. Senior
managers are expected to ensure that employees, contractors, consultants, agents and partners
under their supervision are aware of the Company’s expectations as set out in the Code of Conduct.
78
CORPORATE GOVERNANCE STATEMENT (continued)
Ethical and Responsible Decision Making (continued)
For personal use only
All Directors, officers and employees are expected to:
•
•
•
•
Comply with the law;
Act in the best interests of the company;
Be responsible and accountable for their actions; and
Observe the ethical principles of fairness, honesty and truthfulness, including prompt
disclosure of potential conflicts.
A copy of the company’s Code of Conduct is available on the company’s website.
b. Policy Concerning Trading in Company Securities
The Board has adopted a Securities Trading Policy which complies with the requirements of Listing
Rule 12.12 which regulates dealings by directors, officers and employees in securities issued by the
company.
The policy, which is available on the company’s website, includes the company’s closed periods,
restrictions on trading that apply to the company’s Key Management Personnel, trading that is not
subject to the policy, exceptional circumstances in which Key Management Personnel may be
permitted to trade during a prohibited period with prior written clearance and the procedure for
obtaining written clearance. The policy provides that employees, directors and officers must not
enter into transactions or arrangements which operate to limit the economic risk of their security
holding in the company without first seeking and obtaining written acknowledgement from the
Board.
A copy of the Company’s Securities Trading Policy is available on the Company’s website.
c. Gender Diversity
Diversity includes, but is not limited to, gender, age, ethnicity and cultural background. The company
is committed to diversity and recognises the benefits arising from employee and board diversity and
the importance of benefiting from all available talent. Accordingly, the company has established a
Diversity Policy which is available on the company’s website.
The Board has a commitment to promoting a corporate culture that is supportive of diversity and
encourages the transparency of Board processes, review and appointment of directors. The Board is
responsible for developing policies in relation to the achievement of measurable diversity objectives
and the extent to which they will be linked to the Key Performance Indicators for the Board,
Managing Director and senior executives.
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Ethical and Responsible Decision Making (continued)
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The company’s strategies may include:
5.
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recruiting from a diverse range of candidates for all positions, including senior executive roles
and Board positions;
reviewing pre-existing succession plans to ensure that there is a focus on diversity;
encourage female participation across a range of roles across the company;
review and report on the relative proportion of women and men in the workforce at all levels of
the company;
articulate a corporate culture which supports workplace diversity and in particular, recognizes
that employees at all levels of the company may have domestic responsibilities;
develop programs to encourage a broader pool of skilled and experienced senior management
and Board candidates, including, workplace development programs, mentoring programs and
targeted training and development; and
any other strategies that the Board or the Nomination Committee develops from time to time.
At the date of this report, 50% of the company’s full-time employees are female. The company also
utilises the services of a number of female consultants, in varying roles. No women are currently
represented on the Board.
Due to the current size, nature and scale of the company’s activities, the Board has not yet
developed objectives regarding gender diversity. As the size and scale of the company grows the
Board will set and aim to achieve gender diversity objectives as director and senior executive
positions become vacant and appropriately qualified candidates become available.
Timely and Balanced Disclosure
a. Shareholder Communication
The company believes that all shareholders should have equal and timely access to material
information about the company including its financial situation, performance, ownership and
governance. The company’s Continuous Disclosure Policy encourages effective communication with
its shareholders by requiring that the company announcements:
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Be factual and subject to internal vetting and authorisation before issue;
Be made in a timely manner;
Not omit material information;
Be expressed in a clear and objective manner to allow investors to assess the impact of the
information when making investment decisions;
Be in compliance with ASX Listing Rules continuous disclosure requirements; and
Be placed on the company’s website promptly following release.
Shareholders are encouraged to participate in general meetings. Copies of addresses by the
Chairman or Chief Executive Officer are disclosed to the market and posted on the company’s
website. The company’s external auditor attends the company’s Annual General Meeting to answer
shareholder questions about the conduct of the audit, the preparation and content of the audit
report, the accounting policies adopted by the company and the independence of the auditor in
relation to the conduct of the audit.
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b. Continuous Disclosure Policy
6.
The company is committed to ensuring that shareholders and the market are provided with full and
timely information and that all stakeholders have equal opportunities to receive externally available
information issued by the company. The company’s Continuous Disclosure Policy described in 5(a)
reinforces the company’s commitment to continuous disclosure and outline management’s
accountabilities and the processes to be followed for ensuring compliance.
The policy also contains guidelines on information that may be price sensitive. The company
Secretary has been nominated as the person responsible for communications with the ASX. This role
includes responsibility for ensuring compliance with the continuous disclosure requirements with
the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX.
Recognising and Managing Risk
The Board is responsible for ensuring there are adequate policies in relation to risk management,
compliance and internal control systems. The company’s policies are designed to ensure strategic,
operational, legal, reputation and financial risks are identified, assessed, effectively and efficiently
managed and monitored to enable achievement of the Company’s business objectives. A written
policy in relation to risk oversight and management has been established (Risk Management and
Internal Control Policy). Considerable importance is placed on maintaining a strong control
environment. There is an organisation structure with clearly drawn responsibilities.
a. Board Oversight of the Risk Management System
The Board is responsible for approving and overseeing the risk management system. The Board
reviews, at least annually, the effectiveness of the implementation of the risk management controls
and procedures.
The principle aim of the system of internal control is the management of business risks, with a view
to enhancing the value of shareholders’ investments and safeguarding assets. Although no system
of internal control can provide absolute assurance that the business risks will be fully mitigated, the
internal control systems have been designed to meet the company’s specific needs and the risks to
which it is exposed.
Annually, the Board is responsible for identifying the risks facing the company, assessing the risks
and ensuring that there are controls for these risks, which are to be designed to ensure that any
identified risk is reduced to an acceptable level.
The Board is also responsible for identifying and monitoring areas of significant business risk.
Internal control measures currently adopted by the Board include:
•
Monthly reporting to the Board in respect of operations and the company’s financial position,
with a comparison of actual results against budget; and
•
Regular reports to the Board by appropriate members of the management team and/or
independent advisors, outlining the nature of particular risks and highlighting measures which
are either in place or can be adopted to manage or mitigate those risks.
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b. Risk Management Roles and Responsibilities
The Board is responsible for approving and reviewing the company’s risk management strategy and
policy. Executive management is responsible for implementing the Board approved risk
management strategy and developing policies, controls, processes and procedures to identify and
manage risks in all of the company’s activities.
The Board is responsible for satisfying itself that management has developed and implemented a
sound system of risk management and internal control.
c. Chief Executive Officer and Chief Financial Officer Certification
The Chief Executive Officer and Chief Financial Officer provide to the Board written certification that
in all material respects:
•
The company’s financial statements represent a true and fair view of the company’s financial
condition and operational results and are in accordance with relevant accounting standards;
•
The statement given to the Board on the integrity of the company’s financial statements is
founded on a sound system of risk management and internal compliance and controls which
implements the policies adopted by the Board; and
•
The company’s risk management and internal compliance and control system is operating
efficiently and effectively in all material aspects.
d. Internal review and risk evaluation
Assurance is provided to the Board by executive management on the adequacy and effectiveness of
management controls for risk on a regular basis.
When evaluating potential acquisitions or investments, the Board undertakes a methodical
investigation and due diligence review of each project.
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